A Comprehensive Framework for Converting Failed Financial and Artificial Intelligence Institutions into Mission-Driven Public Utilities
The United States economy stands at a precarious juncture, defined by the convergence of several systemic fragilities: a structurally vulnerable banking sector; a rapidly inflating financial bubble around artificial intelligence dangerously detached from revenue realities; the potential of mass layoffs enabled by AI and other accumulated productivity gains; and a national fiscal position so degraded by decades of unproductive borrowing that another major bailout could trigger a crisis of confidence in the dollar itself.
The historical lessons of the 2008 Global Financial Crisis and the more recent 2023 failures of Silicon Valley Bank, Signature Bank, and First Republic Bank demonstrate that the prevailing model of crisis resolution—privatizing gains while socializing losses—remains a persistent flaw in American economic policy. As the AI sector approaches a potential correction, creating a "doom loop" scenario where the bursting of the AI bubble precipitates both widespread bank insolvencies and mass layoffs, the need for a new resolution framework has never been more urgent.
We cannot afford another bailout. For decades, the United States has squandered its unique fiscal advantage—the ability to borrow in the world's reserve currency at favorable rates—on corporate rescues, wars of choice, and tax cuts that produced no lasting productive capacity. The well is not infinite. The dollar has fallen nearly 11% in 2025; Treasury auction demand is softening; and the world's patience with American fiscal irresponsibility is wearing thin. The borrowing capacity we have left must be preserved for genuine public investment—infrastructure, industrial policy, climate adaptation—not for rescuing speculators from the consequences of their bets.
This report proposes the Won't Get Fooled Again Act (WGFAA), a policy framework designed to update the mechanisms of financial resolution for the age of artificial intelligence. Unlike previous regulatory regimes focused on "orderly liquidation" or emergency bailouts, the WGFAA mandates a Conversion Protocol: the automatic transformation of failed systemically important institutions into mission-driven public utilities, funded entirely by industry levies rather than taxpayer dollars.
The central argument of this report is that "systemic importance" can no longer be defined solely by the flow of currency; it must now encompass the flow of computation, data, and intelligence. Just as the collapse of a major bank threatens the credit lifeline of the real economy, the disorderly failure of a major AI provider or compute provider threatens the digital infrastructure upon which national security, economic competitiveness, and public services increasingly rely.
This proposal bifurcates its approach to address the unique needs of two critical sectors:
Technology Sector Reform: Transforming failed "Systemically Important Technology Institutions" (SITIs) into mission-driven public utilities, ensuring that the collapse of a major AI provider results in a public research asset rather than a liquidation sale to foreign adversaries or domestic monopolists.
Crucially, this proposal rejects the model of purchasing equity at speculative bubble prices. It mandates a strict Asset-Based Valuation Standard for any government acquisition, ensuring taxpayers pay only for tangible infrastructure and proven intellectual property—not for speculative goodwill or inflated growth projections. Speculators are wiped out. Executives face clawbacks. The public gets lasting assets rather than temporary stability.
By synthesizing extensive data on market fragility, legal precedents for receivership, and successful governance models from institutions like CERN and the Bank of North Dakota, this report provides an exhaustive roadmap for implementation. The WGFAA demonstrates that converting failed institutions into public utilities is not merely an ideological preference but a strategic and fiscal necessity—the only path that prevents further concentration of power, preserves America's borrowing capacity for productive investment, and ensures that the transformative power of AI serves the broad American public.
