Tech billionaire Elon Musk predicts American bankruptcy as interest payments on Washington’s debt will swallow all the tax revenues with nothing left for critical needs
The US is spiraling towards bankruptcy and will quickly go bust if Washington doesn’t stop spending so much money, Tesla and SpaceX CEO Elon Musk has warned.
Musk was commenting on a post on X, which highlighted skyrocketing interest payments on US government debt.
“We now pay nearly $1.2 trillion per year in interest on the debt, about 23% of all taxes, tariffs and fees collected by the US govt goes to paying interest on the debt,” the Wall Street Silver account posted.
CEO of Tesla, Chief Engineer of SpaceX and CTO of X Elon Musk. © Michael M. Santiago/Getty Images
Musk replied, warning that “if there is not a radical reduction of government expenditures, then, just like an individual who has taken on too much debt, America will become de facto bankrupt.”
“The interest on the debt is trending to rapidly absorb all tax revenue, leaving nothing for critical needs,” he added.
Musk previously pointed out in September that the cost of servicing the vast US federal debt has outstripped the current defense budget, which topped $840 billion this year.
The US Treasury announced in late July that the national debt had surpassed $35 trillion, soaring by a trillion in a six-month period. The current figure is $35.7 trillion, according to the US Debt Clock.
This is not the first time the tech billionaire has sounded the alarm over US debt. Earlier this year, Musk said that the current rate of government spending was putting the US in the fast lane to bankruptcy, and that government overspending was stoking inflation.
In September, he wrote that every trillion dollars of debt added is money that “our kids and grandkids are going to have to pay somehow.” If debt keeps growing at this pace, Musk warned, the US will be trapped in a vicious cycle where “the only thing we’ll be able to pay is interest.”
In August, the US Labor Department reported that annual inflation had dipped below 3% in the previous month for the first time since 2021. Prices of goods and services went up by 2.9%, while core inflation, which excludes the food and energy industries, rose by 3.2% over the previous 12 months.
Source X/RT/AFP