Elon Musk: America is Going Bankrupt

The massive growth of the national debt has been a growing problem in America for some time. Now it has also caught the attention of Tesla CEO Elon Musk. On Platform X (formerly Twitter), he has published several posts in recent weeks referring to both the destruction of the dollar and rising interest payments by the US government.

“By the way, America is going bankrupt,” Musk wrote in a July 22 post on social media platform X. The post was in response to Dogecoin creator Billy Markus’s post, where he had in turn shared an article about a report about rising interest payments in the US.

America is going bankrupt btw https://t.co/UYpri3wyJU

— Elon Musk (@elonmusk) July 22, 2024

The article referred to a report that outlined the revenues and expenses of the US budget for the month of June and the fiscal year. It turned out that the US government received $184.9 billion from personal income taxes in June, while $140.2 billion was spent on interest payments on the national debt.

The Treasury Department estimates that interest costs for the entire fiscal year will reach more than $1.14 trillion

Economist EJ Antoni reported in X that interest payments were proportional to 76 percent of personal income tax revenue. “This is the largest source of revenue for the Ministry of Finance, and three-quarters of it just goes to pay interest. Does Congress know? Are they bagged at all?” Antoni asked in his post.

Government Incompetence

Musk commented under Anton’s post: “I’m very pleased that 76 percent of the income tax I pay goes to important things, like paying interest on past government incompetence.”

Four days later, Musk wrote again on X: “America is headed for bankruptcy, just FYI.” He shared with Mises Institute member Peter St. Here’s a video where he spoke about the unsustainable fiscal position of the US. He spoke about how the lost decade of the 1970s could now be repeated in the Western world.

America is headed for bankruptcy fyi https://t.co/O6FH5BK4aQ

— Elon Musk (@elonmusk) July 26, 2024

Where is the Dollar?

On July 22, Musk also posted a picture of Xi showing where the US dollar is currently in its evolution.

“Where do you think we are in the process of destroying the value of the dollar?”

Musk added to his post

If the first phase was a silver coin, followed by silver certificates on paper (paper money backed by silver), then the third was the Federal Reserve notes, which are backed only by debt.

The fourth phase shows a $50 trillion dollar bill from Zimbabwe’s 2008 hyperinflation. However, in the fifth phase, a gun bullet is shown, presumably referring to the wars that tend to follow after such processes (hyperinflation) take place.

Where are we with dollar value destruction, you might ask? pic.twitter.com/0LD8OggFqu

— Elon Musk (@elonmusk) July 22, 2024

Musk has also previously written that the financial position of the USA is very bad and that Americans are facing difficult times. “We have to do something, otherwise the dollar will soon be worthless,” he wrote at the beginning of May.

🇺🇸McMaster: WW3 IS COMING… DOUBLE OUR DEFENSE SPENDING NOW!

Trump’s Former National Security Advisor, H.R. McMaster, warns that the world is “on the cusp” of a potential World War due to escalating global tensions.

“We could be on the cusp of another World War.

I know that… pic.twitter.com/kUEAaSbDIl

— Mario Nawfal (@MarioNawfal) May 3, 2024

At the beginning of 2000, the national debt of the United States was 5.77 trillion dollars, but by the beginning of 2010 it had increased to 12.77 trillion and by the beginning of 2020 to 23.22 trillion. However, the subsequent growth of the national debt has been insane – by now, the national debt has risen to 34.9 trillion dollars, according to the latest data from the US Treasury Department.

The Treasury Department expects interest payments to be $1.14 trillion this year

This could be seen as a rather conservative forecast and the interest payments will more likely reach the range of 1.3-1.5 trillion dollars. Recall that the government’s own total revenue for the fiscal year is about $5 trillion.

Read more on the topic here: Debt spiral: US debt grew more than half a trillion dollars in two weeks

Key Takeaways

The alarm raised by Elon Musk and echoed by various commentators highlights a concerning trajectory for the United States’ financial stability. With national debt soaring to unprecedented levels and interest payments consuming a significant portion of tax revenue, the country’s fiscal health appears increasingly precarious.

Musk’s comments and the associated discussions underscore the urgency of addressing these economic challenges. The parallels drawn with historical periods of hyperinflation and economic downturns serve as a stark warning of potential future consequences if corrective actions are not taken.

As the debate continues, it is imperative for policymakers and the public to engage seriously with these issues to avoid a looming financial crisis.