Elon Musk appears sure that the American Economy is headed for a catastrophic collapse. In a tweet on X today, Elon replied to an economic data post stating, “America is headed for bankruptcy, fyi.”
Rising national debt has long been a major issue in America, and Elon Musk, the CEO of Tesla, has taken notice. This economic state is one he has held for months. On July 22, 2024, Elon said, “America is going bankrupt, btw.” The tweet was in response to a post by Billy Markus, the founder of Dogecoin.
To that end, Peter Schiff, a known crypto critic, agreed, “It won’t stop there. Soon, 100% of federal tax revenue will go to pay interest on the debt. All new government spending will be financed by debt. The Fed will, of course, monetize it, so inflation will be the government’s only source of funding. Inflation is the most expensive tax.”
According to reports, 76% of all personal income tax last month went to servicing the $34 trillion national debt. One X user asks “How did we get here?” His answer is “Two men: FDR and Richard Nixon. Together, they broke the dollar. And put the American people into debt slavery.”
In June 2024, the US government paid $140.238 billion in interest on Treasury securities. For reference, the government collected $184.910 billion in individual income taxes in the same month.
This means that 76% of June’s individual income tax revenue was used completely for national debt interest payments, excluding principal repayment.
Elon Musk sees the American economy doom
The US economy saw a low GDP growth rate of 1.4% in 2023-24, a significant decrease from 3.4% in the fourth quarter of 2023. The third quarter’s growth rate is expected to be lower, possibly falling to around 1%.
However, some economic analysts believe that if inflation and interest rates fall, the economy will pick up later this year and reach a 2% annual growth rate. While the United States has long boasted a healthy and booming economy, its national debt has been rapidly increasing.
For example, the federal government debt in the United States was $5.77 trillion at the beginning of 2000, more than quadrupled to $12.77 trillion by the beginning of 2010, and is expected to reach $23.22 trillion by the beginning of 2020.
The most recent growth has been particularly striking, with the national debt hitting $34.94 trillion, according to the latest Treasury Department numbers.
The federal Department estimates that interest payments on federal debt instruments will reach $1.14 trillion this fiscal year.
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