Macomb, Detroit-“The defence department budget is a very big budget. It is one trillion dollars a year, Defence intelligence included, and interest payment on national debt is $1 trillion, which just exceeded the Defense Department’s budget; they are over a trillion dollars a year, just in interest and rising. We are adding a trillion to our national debt, which our kids and grandkids will have to pay somehow, every three months and then soon every two months, then every month. The only thing we shall be able to pay is the interest. This does not have a good ending. So we have to reduce spending. This is insane. We need to drastically cut spending, or we are heading for a financial disaster. Time to rethink our priorities.”
This horrifying picture is not that of a Third-World, poverty-stricken country but of the most powerful nation in the history of mankind, the USA. This picture was painted by none other than Elon Musk, during his latest interview on X, who is now a close associate and advisor of President-elect Donald J. Trump.
Additionally, generating controlled regional conflicts could sustain demand for US military hardware and services, transforming defence exports into a lucrative revenue source while reinforcing geopolitical dominance. Strengthening alliances and encouraging financial contributions to collective security frameworks, coupled with defence-driven innovation and monetizing dual-use technologies, would add resilience to the US economy. These strategies ensure economic growth and maintain the USA’s position as a global superpower without compromising its defense capabilities or risking its global leadership. The choice is clear: either adopt Elon Musk’s vision or pursue the exact opposite approach to secure long-term economic and strategic dominance
This debt figure quoted by Musk means that every American would be required to pay $35,928 annually toward the national debt. This burden would reduce the per capita income of every American from $80,035 to $44,107, a drastic decline that would push the USA out of the top 10 countries by per capita income, placing it well below most developed nations.
Such a financial strain would represent nearly 45 percent of the average American’s income, severely impacting personal finances and leaving limited disposable income. Compared to high-income countries like Luxembourg ($125,897) and Singapore ($105,689), this drop illustrates the immense burden the debt crisis imposes.
The story doesn’t end here. The total US national debt stands at $35.5 trillion, which is 128.13 percent of its GDP of $27.5 trillion in 2024. Should the USA be required to repay this staggering debt in a single year, its entire economic output would fall far short. Even if all government revenue, corporate profits, and personal incomes were redirected to debt repayment, the shortfall would necessitate extreme measures, such as selling national assets or printing massive amounts of money. These actions would destabilize the economy, leading to hyperinflation, currency collapse, and a potential loss of global confidence in the dollar.
The dire scenario, as painted by Elon Musk during his interview on X, appears to have resonated with President-elect Donald J. Trump, who subsequently tasked Musk and Vivek Ramaswamy with a formidable mandate: to drastically cut federal and state government spending, including defense, as part of a broader fiscal overhaul.
But what if Musk’s analysis has overlooked critical factors? Cutting spending, particularly in areas like defence and government programmes, risks undermining the U.S.’s global leadership and economic stability.
Elon Musk’s proposed solution of trimming the defence budget would significantly weaken the USA’s ability to maintain its formidable military power, which has been the cornerstone of its global dominance. If the USA were to cut its defence budget from $1 trillion to $500 billion annually, it would severely reduce its capacity to sustain a robust global presence, project power, and respond to emerging threats. Such a reduction would open the door for rivals like China, India, and Russia— nations not burdened by comparable debt crises— to grow stronger and potentially overtake the USA as the world’s dominant military and economic power. This would mark a dramatic shift in the global balance of power, diminishing the USA’s influence on world affairs.
Moreover, this proposal seems inconsistent with the war-driven rhetoric espoused by both Elon Musk and President-elect Donald J. Trump, who have floated audacious ideas such as annexing Canada, reclaiming influence over Great Britain, conquering Greenland, taking control of the Panama Canal, and rebranding the Gulf of Mexico as the Gulf of America. Achieving these bold, albeit controversial, objectives would require a substantial increase in defence spending, not a reduction. A diminished defence budget would make such ambitions impossible, leaving the USA vulnerable to external threats and unable to sustain its position as the world’s only superpower.
Additionally, the formidable US war machine has made the dollar an invaluable intangible asset, contributing an estimated $1-1.5 trillion annually to the economy and effectively offsetting the negative impact of the nation’s debt burden. This “dollar power” allows the USA to earn seigniorage revenue, enjoy reduced borrowing costs, attract substantial foreign investment, and maintain low import costs, collectively bolstering GDP and enhancing economic stability. It also enables the USA to borrow at lower interest rates, saving up to $700 billion annually, while foreign investment inflows and cheaper imports further amplify its economic advantage.
If Elon Musk’s proposal to drastically cut spending, including defense, is adopted, the combined impact of soaring debt obligations and the potential loss of the dollar’s reserve currency status would devastate the US economy. This could lead to a 53 percent decline in per capita income, from $80,035 to $37,491, significantly reducing Americans’ quality of life and weakening the nation’s global standing. Economically and strategically, Musk’s solution appears regressive and counterproductive, risking the very foundations of US dominance.
Instead of cost-cutting, the solution lies in increasing revenue streams and redistributing the cost of U.S. military power. A key measure would be requiring NATO allies and Middle Eastern partners to bear a larger share of the cost of US military deployments, emphasizing the stability these forces provide to their regions. The USA could also replicate China’s Belt and Road Initiative (BRI) by creating global infrastructure and investment projects, allowing it to control strategic assets, expand trade routes, and extend its economic and political influence.
Additionally, generating controlled regional conflicts could sustain demand for US military hardware and services, transforming defence exports into a lucrative revenue source while reinforcing geopolitical dominance. Strengthening alliances and encouraging financial contributions to collective security frameworks, coupled with defence-driven innovation and monetizing dual-use technologies, would add resilience to the US economy. These strategies ensure economic growth and maintain the USA’s position as a global superpower without compromising its defense capabilities or risking its global leadership. The choice is clear: either adopt Elon Musk’s vision or pursue the exact opposite approach to secure long-term economic and strategic dominance.
This post was originally published on here
