U.S. debt hits $36.17tr: Musk predicts economic crisis

December 30, 2024 (MLN): The United States national debt has hit a record-breaking $36.17 trillion.

This concerning development has led to a strong warning from Elon Musk, the world’s richest man and CEO of Tesla, as Economic Times reported.

Musk warned that the escalating debt could lead to a devaluation of the U.S. dollar, predicting it could eventually become "worth nothing."

Musk stated. “If we don’t address this now, the consequences for the dollar and the economy could be devastating.”

Musk highlighted a concerning trend as interest payments on the U.S. national debt are now consuming an alarming 23% of the government’s total revenue, a figure that continues to grow.

“If we don't act, the entire government budget will be used just to pay interest,” he explained.

This would leave no funds for critical programs like Social Security or Medicare.

Musk’s grim assessment paints a picture of a potential economic meltdown if reforms aren’t enacted quickly.

The numbers back up Musk’s concerns.

In fiscal year 2024, the federal government spent $1.1265tr on interest payments alone, compared to $4.92tr in total revenue.

With interest costs eating away at the budget, Musk’s warning is a wake-up call for policymakers and citizens alike.

Will America act in time to prevent this financial catastrophe?

Although some of the specialists, such as the analysts from J.P. Morgan, argue that the US is not going to default in light of the unusual possibility of issuance of debt in the US currency, Musk does not point to the negative effects of an too rapid "monetization" of the money.

This method may avoid a technical default, but it may result in runaway inflation and hence the devaluation of the dollar.

Given these challenges, Musk and financial wisemen propose practical solutions for people to protect their wealth:

• Investing in Real Estate: Property values tend to increase with inflation, providing value growth and rental income. Crowdfunding sites and REITs lend themselves even to very small investors.
• Buying Strong Stocks: Musk recommends investing in companies that create valuable products, like Tesla and Apple, which have delivered significant returns in recent years.
• Gold as a Safe Haven: Gold continues to be an evergree .

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