With the United States economy facing uncertainty and the possible onset of a recession, Tesla (NASDAQ: TSLA) CEO Elon Musk is among the influential individuals offering a grim outlook.
Indeed, Musk’s warnings have mainly centered around implementing measures to rescue the economy before severe consequences set in. In this regard, Finbold has highlighted the following warnings issued by Musk regarding the trajectory of the economy.
U.S. will go bankrupt
The billionaire has raised concerns about the government’s spending habits, warning that the country might go bankrupt if the situation is not addressed. The owner of X made these remarks in response to a post highlighting the magnitude of the tax money allocated toward servicing the national debt.
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The post alleged that 76% of tax revenue went towards debt servicing, a critical issue among U.S. economic stakeholders in recent months.
In an X post on August 30, Musk doubled down on the warning, accusing the government of being a “legend” in inflation due to overspending. Based on current spending habits, the billionaire stated, “America is in the fast lane to bankruptcy.”
Credit card debt
Amid economic uncertainty, credit card debt has emerged as one of the factors analysts are using to warn about a possible recession.
In this context, Musk has picked up on the issue, noting that most Americans face a grim future as they struggle with higher prices and steeper interest rates on credit cards, mortgages, and car loans, squeezing monthly budgets. In his view, the current credit card costs have hit “extremely punishing” levels.
“A large number of people are living paycheck to paycheck and with a lot of debt. <…> If you cannot pay them off and you’re still accruing interest at 20%, you’re at best headed to a bad place,” Musk said.
He stated that the situation is also hurting the electric vehicle (EV) industry, as many consumers have less disposable income to spend on a car.
The dollar will be worth nothing
The billionaire entrepreneur has also warned that the rising national debt could erode the dollar’s value. In May 2024, he raised this concern, noting the Federal Reserve’s “stealth money printing” was responsible for factors such as rising inflation.
At the time, he believed this situation partly drove the prices of alternative assets such as Bitcoin (BTC). It’s worth noting that besides Musk, several economic players, such as Robert Kiyosaki, author of Rich Dad Poor Dad, maintain the greenback currency is likely to plunge to zero.
In summary, Musk’s recent commentary has seen the billionaire actively discussing economic issues ahead of the U.S. presidential elections. In this regard, he has aligned himself with Republican candidate Donald Trump’s policies, with reports indicating that Musk might find a role in the government if the former president is elected in November.
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