Expert analysis made easy. Breaking down the news with data, charts, and maps.

Edited by: James Desio and Lexi Baker

Happy Thursday! In today’s newsletter, we examine mass layoffs in the software industry, the percentage of US debt owned by foreigners, and the falling number of US military recruits.

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1. AI or Economic Disruption?

Topline: Starting in 2022, mass layoffs have plagued the software industry, with many companies letting go of thousands of employees. AEI’s Will Rinehart highlights that while many blame economic disruption caused by AI, an economic slump could also be to blame.

Unprecedented Cuts: Recently graduated computer scientists are facing a 6.1 percent unemployment rate. This comes in the wake of over 30,000 layoffs since 2022 at Amazon, Google, and Meta—just to name a few.

Alternative Explanations: Software development job postings are not the only ones falling—listings have slowed for every sector. If AI was the culprit, Rinehart writes, we would expect different industries to be impacted differently and for productivity in the untouched jobs to rise, but neither has occurred.

“What remains clear is that the tech industry’s hiring freeze has created a perfect storm: Even highly skilled workers are finding themselves competing for fewer opportunities, regardless of whether the cause is artificial intelligence or simple economic uncertainty.”—Will Rinehart

2. Foreigners Finance US Debt

Topline: The US heavily depends on foreigners to help finance its budget and current-account deficit. AEI’s Desmond Lachman observes that the Trump administration’s tariff and tax policies are putting this dynamic in peril.

Trillions in Debt: Foreigners own roughly one-third—almost $9 trillion—of US Treasury Debt, and the import tariff policies are putting economic pressure on the United States’ main trading partners. Additionally, tax policy in the “One Big Beautiful Bill” allows for the government to impose a 20 percent tax on interest payments to foreigners, which adds to the pressure.

Dollar in Decline: While some economic forecasts are predicting that the tariffs alone will cause inflation, Lachman illustrates that the proposed tax policy and lack of consideration for the percent of US debt owned by foreigners will exacerbate the problem.

“Much attention has been focused on how President Donald Trump’s import tariff policies might push up inflation. Understandably so, considering tariffs have been raised to their highest level in nearly 100 years. But tariffs aren’t the whole inflation picture. A meaningful decline of the dollar—spurred by the country’s parlous public finances and a deficit-boosting tax bill—may also reignite inflation.”—Desmond Lachman

3. Military Parade Pros

Topline: America’s military is shrinking because the services have been unable to recruit enough members to defend the country. AEI’s Kori Schake observes that President Donald Trump’s military parade on June 14th might be just what the country needs to reverse this trend and draw more young Americans in to serve.

The Numbers:

• On account of physical and mental health problems, 77 percent of America’s youth did not qualify for military service in 2022.
• Only 9 percent of people in prime serving age—16 to 24—are interested in serving.
• In 2023, the Marine Corps and the Space Force were the only two branches to meet their recruiting goals.

Likeliness to Serve: People are more likely to participate in military service if they live near a base or are part of a military family. This indicates that more familiarity and exposure to the military may make people more willing to serve.

“A big celebration of the country’s armed forces—with static displays on the National Mall afterward, and opportunities for soldiers to mix with civilians—could familiarize civilians with their armed forces and, in doing so, draw talented young Americans to serve.”—Kori Schake

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