Elon Musk warns us of “de facto” bankruptcy if $37 trillion of debt is not settled, Peter Schiff says, “We are already bankrupt”
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Billionaire entrepreneur Elon Musk Again, concerns about the fiscal outlook for the United States are warning that the terrible consequences are interest in the federal debt balloon to an unsustainable level.
what happened: Musk warned in an article about X on Tuesday that the U.S. is shaking as federal debt exceeds $37 trillion, and that interest on that debt also accounts for 25% of all tax revenue.
Quoting posts from popular X accounts, Wall Street Lady“If you continue to do this,” Musk said, then all taxes will end up being used to serve state debt, and “nothing else.”
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The cited post highlights the gravity of this situation, pointing out that the U.S. government’s total revenue is $5 trillion, and interest payments are now $1.2 trillion, while the government continues to spend $7 trillion a year, resulting in a sustained and growing deficit.
economist Peter Schiff Responding to Musk’s position, saying the United States is bankrupt, is just a “an obvious question of time for our creditors.” Skiff later warned that after this, “interest rates will soar to the cost of debt services will exceed total tax revenue.”
“The Fed will release out-of-control inflation to prevent this from happening,” Schiff said.
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Why it matters: Last month, Deutsche Bank Jim Reid Warnings say the United States faces “a thousand deaths” if the fiscal situation is not corrected and gradually erodes confidence.
Musk has until recently led the Trump administration’s ministry of efficiency, or the Governor’s budget settlement bill, whose tax breaks and “massive, outrageous, pork-filled” spending packages called it “annoyingly abominable.”
