Elon Musk will co-lead a new agency focused on government budget efficiency.
Elon Musk has warned that the United States faces bankruptcy unless significant steps are taken to address government spending and the growing national debt.
The SpaceX and X CEO will co-lead the upcoming Department of Government Efficiency (DOGE), aiming to cut unnecessary federal spending under a future Donald Trump administration. Musk, who has previously voiced concerns about US insolvency, reiterated his warning on X Friday, stating that immediate action is crucial to prevent bankruptcy.
“Major and immediate action is needed to prevent America from going bankrupt,” Musk tweeted in response to a DOGE post highlighting uncontrolled federal spending.
DOGE emphasized that the last comprehensive federal government review occurred in 1984, when the national debt was $1.6 trillion, representing 38% of GDP. Today, the debt-to-GDP ratio has soared to over 121%, with the national debt exceeding $36 trillion. Treasury Secretary Janet Yellen projects this debt will hit the reinstated debt ceiling the day after President-elect Trump’s inauguration.
During Trump’s reelection campaign, Musk committed to reducing government waste and streamlining the federal bureaucracy, initially proposing a $2 trillion cut to the roughly $7 trillion federal budget. He later adjusted this figure, describing it as a “best-case outcome” in a recent interview.
“If you try for $2 trillion, you have a good shot at getting $1 trillion,” Musk told Stagwell CEO Mark Penn on X. He believes a $1-2 trillion reduction in federal spending would balance the nation’s output with the money supply, helping to control inflation.