‘Big Short’ investor Steve Eisman warns the U.S. economy is a ‘tale of two cities’ that ‘is not even growing 50 basis points outside of AI’

Economic Overview - The U.S. economy is described as a "tale of two cities," where GDP growth appears strong but is heavily influenced by AI expenditures, leading to stagnation when these are excluded [1][2] - The estimated U.S. GDP for 2024 is $29.18 trillion, with a projected growth of 1.8% in 2025, equating to approximately $530 billion. However, AI infrastructure spending by major companies like Google, Amazon, and Microsoft is estimated at $400 billion, suggesting minimal real growth when adjusted for AI [2] Consumer Debt and Economic Struggles - Household debt has risen by $185 billion, reaching $18.39 trillion in the second quarter of 2025, with auto loan balances increasing by $13 billion to $1.66 trillion and student loan balances rising by $7 billion to $1.64 trillion [4] - The auto sector is highlighted as a significant area of consumer struggle, with the pandemic stimulus checks creating an illusion of wealth that allowed consumers to qualify for prime loans despite underlying financial instability [5] Credit Market Concerns - The notion of prime credit scores is challenged, as many loans categorized as prime are actually subprime, indicating a misrepresentation of consumer creditworthiness [5][6] - The pandemic period saw a surge in car sales, often above sticker prices, driven by supply-chain issues and heightened consumer demand, further complicating the economic landscape [6]