The US is at risk of bankruptcy unless “major and immediate” action is taken to address government spending amid mounting federal debt, Elon Musk has warned.
The SpaceX CEO and owner of X is slated to co-lead the upcoming Department of Government Efficiency (DOGE), an agency tasked with reducing unnecessary federal expenditures once President-elect Donald Trump assumes office. Musk, who has previously raised concerns about the possibility of US bankruptcy, reiterated his warning in a post on X on Friday.
“Major and immediate action is needed to prevent America from going bankrupt,” Musk wrote in response to a DOGE post discussing unchecked federal spending.
DOGE noted that the last comprehensive review of the federal government took place in 1984, when the national debt was $1.6 trillion, with a debt-to-GDP ratio of about 38%. Today, the ratio has surged to over 121%, and the national debt has surpassed $36 trillion. It is projected to hit the recently reinstated debt ceiling a day after Trump’s inauguration, according to Treasury Secretary Janet Yellen.
During Trump’s reelection campaign, Musk pledged to reduce government waste and streamline the federal bureaucracy. He initially proposed cutting the nearly $7 trillion federal budget by $2 trillion. However, in a recent interview, Musk tempered expectations, calling the figure a “best-case outcome.”
“If you try for $2 trillion, you have a good shot at getting $1 trillion,” Musk told Stagwell CEO Mark Penn in a conversation on X. He estimated that a reduction in federal spending by $1-2 trillion would balance the output of goods and services with the money supply, helping to curb inflation.
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