Elon Musk has warned that the ‘superpower’ nation on the Atlantic may go bankrupt if fast action is not done. America is in debt up to its neck. The quantity of money borrowed increases over time. The situation has deteriorated so much that even sustaining its magnificence has become difficult. This has raised worries among Elon Musk, one of the world’s wealthiest persons and industrialists. He has projected that the ‘superpower’ nation on the Atlantic may face bankruptcy if prompt action is not done.
Elon Musk has warned that: Elon Musk has spoken candidly about the United States’ financial crisis on a popular podcast show. He advocated immediate and stringent actions to solve the problem. In addition, the world’s wealthiest manufacturer gave the general population motivating counsel on how to deal with inflation.
Musk claimed that America’s national debt has hit a new peak. According to government estimates, the overall debt of the United States has reached $36 trillion. This year alone, the ‘superpower’ nation on the Atlantic has added $2 trillion to its debt.
The United States has collected $4.92 trillion in revenue so far, this fiscal year, as of the first week of December. The US government has spent $1.92 trillion exclusively on debt interest payments.
Data suggest that Washington devotes roughly 23% of its overall revenue to this sector. Adding insult to injury, the second big issue is foreign investment. To finance its financial shortfall, the US Treasury Department has issued bonds several times in recent years. A considerable number of these bonds have been purchased by investors from China, a fierce opponent.
Over the last few decades, the United States has borrowed at an unparalleled rate. At the start of this century, the United States’ national debt was $5.7 trillion. However, by 2020, the sum had risen to $23.2 trillion. In ensuing years, the national debt has continued to rise dramatically.
The COVID-19 epidemic began to spread globally in 2020, having a significant economic impact on the United States. To recover from this setback, the United States incurred substantial debt in the post-pandemic period. Financial analysts say the decision has aggravated Washington’s problems.
The Federal Reserve, the United States’ official bank, has stated that debt totaled $16 trillion in the years following the pandemic. The national debt has climbed by $6.3 billion each day for the past 316 days, beginning on November 30 of current year. As a result, the average American owes $108,000.
The concern does not end there. The United States’ national debt now accounts for 125% of the country’s overall GDP. Experts forecast that the debt-to-GDP ratio will eventually grow to 200%. In this scenario, the national debt would be twice as large as Washington’s economy.
Elon Musk has cited enormous military spending in Ukraine and Taiwan as the second significant factor for the rise in US debt. He blames the incumbent President, Joe Biden, for this. Musk clearly condemned Washington’s exorbitant and unneeded spending during the Russia-Ukraine conflict, which has been continuing on since February 24, 2022, calling it a dumb decision.
In addition, Musk cited a 2017 law as a contributing factor to the current predicament. This law, enacted during Donald Trump’s first term as president, decreased income taxes to benefit the public. However, Musk stated on the podcast that this resulted in an unmanageable increase in the government’s revenue deficit.
In January of next year, freshly elected President Donald Trump will take the oath of office. Financial analysts believe that once in power, his primary job will be to reduce the huge national debt. As a result, it is highly likely that several of his ambitious programs will suffer substantial setbacks.
Analysts expect that President Trump will prioritize cutting government expenditure to lower the national debt. He has already declared plans to create a new ministry, the “Department of Government Efficiency.” The veteran Republican leader has picked billionaire industrialist Elon Musk and Indian-origin Republican leader Vivek Ramaswamy to spearhead this endeavor.
According to insiders, the new department would investigate inept government officials and unnecessary agencies. They will then be dismissed from the administration per Trump’s directive. Musk claimed that this measure might save billions of dollars in unneeded expenses. He has also recommended lowering the public broadcasting budget to further reduce costs.
In the podcast discussion, Musk mentioned a few extra approaches. During his election campaign, Trump promised making America tax-free, which Musk adamantly opposed. On the contrary, Musk has campaigned for higher taxes.
Musk also underlined the importance of reducing the international trade deficit, with China becoming as the key challenger to the United States in this area. Most notably, the billionaire industrialist emphasized the significance of reducing defense budget.
It is uncertain what decision Trump will make on taxes. However, he has hinted at lowering defense spending. Furthermore, he has been heard contemplating the prospect of pulling the US from the NATO military alliance. Even before taking office, he had warned NATO allies about raising defense spending.
Seeing growing inflation in the United States, Musk has issued three pieces of money-saving advice to Americans. He suggested investing in real estate and gold. He also recommended investing in the stock of companies whose products are projected to undergo price hikes in the future.
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