Elon Musk Warns of U.S. Bankruptcy Due to Government Overspending

Elon Musk has raised alarms about the direction of the U.S. economy, predicting that unchecked government spending could lead to bankruptcy.

He took to X (formerly Twitter) to criticize the government’s financial policies, pointing to a projected $16 trillion addition to the national deficit by 2035. Musk argues that this level of overspending is a key driver of inflation and threatens the country’s economic stability.

His concerns come as new data from the Commerce Department shows that inflation remains stable, with the Personal Consumption Expenditures (PCE) index holding at 2.5% in July. Despite this, the nation’s debt has surged to $35.27 trillion, fueling ongoing worries about the long-term health of the economy.

Musk’s warning arrives at a time of uncertainty in global markets, particularly as the Federal Reserve weighs future interest rate cuts. While inflation appears under control for now, the growing national debt casts a shadow over any economic optimism.

Bitcoin, often seen as a hedge against inflation, briefly surged past $59,000 following the release of the PCE data, although concerns about debt soon cooled the rally. Some analysts believe that Bitcoin could gain more traction as a safe haven, especially if fears over inflation and fiscal policy persist.

Adding to the intrigue, Musk recently won a legal battle over allegations that he and Tesla manipulated the price of Dogecoin. A federal judge dismissed the case, citing insufficient evidence that Musk or Tesla engaged in fraudulent activities related to the cryptocurrency.