The chief executive officer of Tesla, Elon Musk, intensified his warnings about United States public debt, predicting that financial disaster is almost certain without the transformative impact of artificial intelligence and robotics on the economy.
In a lengthy and wide ranging interview with podcaster Dwarkesh Patel, in the presence of Stripe cofounder and chairman John Collison, the technology billionaire was asked why he pushed aggressive spending cuts while leading the Department of Government Efficiency (DOGE), given that technology is expected to boost GDP and reduce the debt burden.
Musk replied that he is concerned about waste and fraud in the federal administration, despite reports that many horizontal staff cuts affected critical employees who ultimately had to be rehired.
“Without artificial intelligence and robotics, we are literally completely lost, because the national debt is accumulating at insane rates,” he added.
Musk pointed out that interest alone on the 38,5 trillion dollars of debt amounts to approximately 1 trillion dollars annually, a figure that exceeds the United States defense budget.
Debt servicing costs also exceed spending on social programs such as Medicare.
However, President Donald Trump has pledged to increase annual defense spending to 1,5 trillion dollars, a move that could place the defense budget above interest payments again, at least temporarily.
Economic growth in the United States is driven by the 10% benefiting from Wall Street profits, recession is certain in the event of market turmoil.
On his tenure at DOGE
Referring to his tenure at DOGE, Musk said he hoped to slow the unsustainable fiscal trajectory of the United States, buying time so that artificial intelligence and robotics could strengthen economic growth.
“It is the only thing that can solve the national debt.
We are 1.000% certain that we will go bankrupt as a country and fail as a country without AI and robots,” he predicted.
“Nothing else will address the national debt.
We simply need enough time to build AI and robots so that we do not go bankrupt before then.”
In late November, Musk made similar remarks, telling the podcast of Nikhil Kamath that the development of artificial intelligence and robotics “on a very large scale” is the only solution to the United States debt crisis.
Fear of deflation
However, he warned that the increase in the production of goods and services due to these technologies would likely lead to significant deflation.
“This seems likely, because it simply will not be possible to increase the money supply as fast as the production of goods and services increases,” he added.
Deflation would in practice worsen the real burden of debt, while inflation would initially reduce it, although a subsequent rise in bond yields would ultimately drive interest payments sharply higher.
Advantages of the dollar
Of course, the United States possesses certain advantages due to its economic hegemony, given that the dollar remains the global reserve currency, allowing the Treasury Department to borrow at lower interest rates than would otherwise be possible.
The ability of the United States to issue debt in its own currency, as well as the capacity of the Federal Reserve to purchase bonds, also reduces the risk of an immediate default.
Nevertheless, the Committee for a Responsible Federal Budget (CRFB) warned last month that the United States is on a trajectory that could trigger six different types of fiscal crises.
Although it is “impossible” to predict when disaster will strike, “some form of crisis is almost inevitable” without a change of course, the Treasury Department agency stated.
Data confirm Musk
It should be noted that the United States economy shows mixed signals in the early stages of 2026, with signs of economic resilience but also structural challenges.
Economic growth has maintained a positive pace, U.S. GDP increased at an annualized rate above 4% in the third quarter of 2025, an indication of strong underlying activity and consumption supported by consumer spending.
However, the fiscal backdrop remains weak.
Public debt has exceeded 38 trillion dollars, surpassing 120 % of GDP, while general government deficits are expected to remain elevated at around 7,5 % of GDP in 2025–26.
This condition places pressure on debt sustainability and increases servicing costs, as Musk also notes.
In the labor market, conditions are fragile, unemployment benefit claims have recently increased, while job creation is slowing, despite the relatively low unemployment rate of around 4,4 %.
On inflation, the Federal Reserve remains cautious, inflation is still above the 2% target it has set, but shows signs of easing.
These factors point to an economy that continues to grow but rests on weak foundations of fiscal balance and mounting concerns about the long term sustainability of public debt.
Without structural reform, pressures from debt and deficits may constrain the ability of the United States to cope with future recessions, regardless of progress in artificial intelligence and robotics.
It remains to be seen whether the Trump 2.0 administration will carry out the greatest economic transformation not only in the history of the United States but of the entire planet, otherwise the gates of economic hell will open.
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