Musk raises alarm over surging national debt
Tesla CEO Elon Musk issued a stark warning on Friday about the state of U.S. public finances, arguing that the country is on a path toward bankruptcy unless it makes major advances in artificial intelligence and robotics.
Speaking during a recent podcast appearance, Musk said the national debt is growing at an unsustainable pace and claimed that technological breakthroughs are essential to prevent economic collapse. “We are 1,000% going to go bankrupt as a country and fail as a country, without AI and robots,” he said, pointing to what he described as runaway federal borrowing.
Debt levels and rising interest costs
The U.S. national debt currently stands at about $38.56 trillion, with federal spending continuing to exceed revenue by wide margins. In fiscal year 2026 alone, government spending has surpassed incoming revenue by roughly $602 billion, adding further pressure to public finances.
Musk highlighted the growing burden of servicing this debt, noting that interest payments now exceed the U.S. military budget, which is close to $1 trillion annually. Forecasts from the Committee for a Responsible Federal Budget suggest interest costs could rise above $1.5 trillion by 2032 and reach $1.8 trillion by 2035 if current trends continue.
Dollar value and long-term economic risks
Musk also warned about the potential long-term devaluation of the U.S. dollar. Data from the Federal Reserve Bank of Minneapolis shows that $100 in 2025 has the same purchasing power as just $12.06 in 1970, illustrating the cumulative impact of inflation over decades.
Rising debt levels and accelerating interest obligations could constrain future government spending, reduce fiscal flexibility, and weaken confidence in the dollar, increasing risks for the broader U.S. economy.
AI, robotics, and investor implications
Despite the grim outlook, Musk framed artificial intelligence and robotics as key tools that could boost productivity and help counterbalance the financial strain of mounting debt. He argued that without these technologies, the scale of the fiscal challenge would be nearly impossible to manage.
For investors, Musk’s comments highlight the importance of adapting strategies during periods of fiscal uncertainty. Historically, high debt environments have pushed investors to seek assets and sectors that can better withstand inflation, currency pressure, and economic volatility.