Musk Predicts US Bankruptcy Without Reform

Facing a debt deemed “unsustainable”, the Tesla CEO warns : the United States is heading towards a budget wall. In a conversation with Joe Rogan, he denounces an economic trajectory that has become, in his view, “dead end”. For some, this imminent crisis could propel bitcoin to new heights. The asset, historically linked to distrust of the dollar, could well be strengthened by this announced crisis.

Out-of-control debt : Musk sounds the alarm on US solvency

The CEO of Tesla and SpaceX warns that the United States is heading straight towards bankruptcy, unable in his view to control a systemic deficit, while the US debt reaches 38 trillion dollars.

“This is crazy”, Elon Musk says to Joe Rogan, judging the magnitude of American debt.

In this three-hour interview, he insists : “there is no way to solve the debt crisis, except by adopting an ultra-draconian policy against waste and fraud, which one cannot do in a democratic country”.

The alarm signal comes with a chilling observation : the interest alone on the debt now exceeds the military budget, a point Musk calls a “completely crazy situation”. For him, even extreme austerity measures would only delay the deadline.

Musk’s warning comes in an explosive budget context. Furthermore, federal debt jumped by $500 billion in October alone, reaching a record total of $38 trillion. According to Musk, this trajectory is the result of a series of ineffective policies since the Covid crisis. Among the aggravating factors he mentions or alludes to, we can note :

• Massive post-pandemic public spending used to support the economy during lockdowns ;

• The rapid rise in interest rates, intended to counter inflation, but which sharply increases the cost of debt service ;

• The Trump administration’s “tax & spend” bill, which Musk openly criticizes for its long-term inflationary effects ;

• Lack of real political will to reform, in a system where every spending cut becomes an electoral issue ;

• The country’s democratic structure, which, in his view, prevents any “super draconian” approach to curb fraud and waste.

Musk is no longer merely mentioning a hypothetical risk. He is now talking about an inevitable bankruptcy if the United States does not find a massive growth lever. And for him, this lever can only come from a technological revolution driven by AI and robotics.

Towards a dollar collapse ? Bitcoin presented as a monetary escape

While Musk grows increasingly pessimistic about the United States’ ability to correct its budget path, he puts forward an unexpected solution: the adoption of bitcoin as an alternative to the current monetary system.

Far from being a theoretical hypothesis, this orientation fits within an assumed political strategy. Musk, who has confirmed that his new political movement, “the America Party”, considered adopting bitcoin, now calls the dollar and other fiat currencies “hopeless”, doomed to failure due to their total disconnection from an underlying asset.

Musk’s stance is not isolated. Crypto figures like Anthony Pompliano believe the acceleration of debt creates fertile ground for BTC price increases. In a note, he writes : “the higher the national debt goes, the higher bitcoin goes. And nothing seems to want to stop either one”.

Thus, the bitcoin price briefly exceeded $126,000 in October before retreating due to profit-taking and investors returning to stocks and gold. For Nic Puckrin, analyst at Coin Bureau, “in the long term, the investment case for bitcoin remains intact, even if volatility dominates in the short term”. He mentions an “inevitable monetary devaluation” in a context of increasingly accommodative monetary policies worldwide.

If Musk’s and other analysts’ thesis is confirmed, bitcoin could establish itself as a speculative asset but also as an alternative store of value, thanks to an unprecedented correlation with gold, in a world losing its economic bearings. However, current market instability and uncertainties about central bank policies leave the door open to all scenarios.