US Heading Faster Towards Bankruptcy

JAKARTA – CEO Tesla, Elon Musk claim that United States (US) federal debt burden currently exceeds the defense budget, Musk said in an interview with the All-In podcast.

Finance Department AS announced in late July 2024, that the national debt had surpassed USD35 trillion, after jumping by one trillion in a six-month period.

In June, the U.S. House passed its version of the annual defense policy bill that authorized a record $895 billion in spending, marking a 1% increase over the previous fiscal year.

“Current interest payments on the national debt are higher than the entire Department of Defense budget and continue to rise,” Musk said.

The SpaceX CEO warned that the US is “going bankrupt very quickly.”

The world’s richest man also stressed that every trillion dollars of debt added is money that “our children and grandchildren will have to pay somehow.”

According to Musk, the US already spends more than a trillion dollars per year to pay off its national debt.

Earlier this week, the tech billionaire shared a post on the X platform (formerly Twitter) by an account focused on finance and economics, which stated that the US would have to pay more than $1.2 trillion in interest on its debt in the next 12 months, which is reportedly equivalent to about 25% of government revenue.

Earlier this month, Musk also warned that the current level of government spending was putting the US on the fastest path to bankruptcy. He also stressed that excessive government spending would trigger inflation.

In August, the U.S. Labor Department reported that annual inflation fell below 3% in the previous month for the first time since 2021. Prices for goods and services rose 2.9%, while core inflation, which excludes food and energy industries, rose 3.2% over the previous 12 months.

(acres)