Musk cautions of US bankruptcy
Date
1/21/2025 6:46:30 AM
(MENAFN) Elon Musk has warned that the United States is at risk of bankruptcy unless urgent action is taken to curb government spending amid escalating federal debt. The SpaceX CEO and owner of X is set to co-lead the Department of Government Efficiency (DOGE), an agency dedicated to reducing unnecessary federal expenditures once President-elect Donald trump takes office. Musk reiterated his warning in a post on X on Friday, stressing the need for immediate measures to avoid financial collapse.
Musk’s comments came in response to a DOGE post highlighting the alarming rise in the national debt, which now exceeds $36 trillion, with a debt-to-GDP ratio of over 121%. This is a dramatic increase from 1984, when the ratio was only 38%. Treasury Secretary Janet Yellen has projected that the debt will hit the recently reinstated ceiling just after Trump’s inauguration.
During Trump’s reelection campaign, Musk had proposed reducing the federal budget by $2 trillion, although he recently scaled back expectations, referring to the figure as a "best-case outcome." Musk suggested that even a $1-2 trillion cut could help balance the economy by aligning federal spending with the money supply, potentially helping to curb inflation.
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