It’s no secret that the United States owes tens of trillions of dollars. The question is, how do you fix it?
Now Elon Musk re-entered politics with a bold plan to erase America’s debt.
Musk: AI and Robotics Essential to Tackle US Debt Burden
Elon Musk stated in a podcast interview released Sunday that artificial intelligence and robotics represent the sole viable solution to the United States’ escalating national debt, which now exceeds $38 trillion. The Tesla CEO appeared on A Different Conversation with Nikhil Kamath, where he outlined how productivity surges from these technologies could outpace money supply growth and induce deflation, thereby alleviating fiscal pressures.
Debt Interest Outstrips Military Spending Amid Rising Deficits
Musk highlighted the severity of the situation, noting: “I think that’s pretty much the only thing that’s going to solve for the US debt crisis, because currently the US debt is insanely high.” He added: “The interest payments on the debt exceed the entire military budget of the United States – just the interest payments, and that’s at least in the short-term going to continue to increase.”
For fiscal year 2025, net interest payments reached $1.22 trillion, surpassing the $850 billion allocated to national defense and marking the second-largest federal expenditure after Social Security. Annual deficits, projected at around $2 trillion, continue to fuel the debt’s expansion, with total public debt outstanding at $38.4 trillion as of late November.
Productivity Boom Could Trigger Deflation Within Three Years
Musk explained that AI and robotics would drive a “dramatic increase in the output of goods and services,” outstripping money supply growth and leading to deflation—the inverse of inflation, where price levels decline.
“So I think actually the only thing that can solve for the debt situation is AI and robotics,” he said. “It probably would cause significant deflation because deflation or inflation is really the ratio of goods and services produced to the change in the money supply.”
Addressing current inflation, which hovers above the Federal Reserve’s 2% target, Musk noted: “AI has not yet made enough of an impact on productivity to increase the goods and services faster than the money supply. The US is increasing the money supply quite substantially with deficits that are on the order of $2 trillion, so you have to have goods and services output more than that in order to not have inflation.”
He forecasted a rapid shift: “We’re not there yet, but if you say ‘how long would it take us to get there,’ I think it’s three years. Probably three years – in three years or less, my guess is goods and services growth will exceed money supply growth in about three years.”
AI-Driven Economy Could Decouple from Traditional Monetary Systems
Musk envisioned a transformative impact on the broader economy, where AI and robotics create self-sustaining cycles for producing essentials like chips, solar panels, and further robots.
“I think at a certain point you decouple from the sort of conventional economy if you have AI and robots producing chips and solar panels and mining resources in order to make chips and robots… You sort of complete that cycle, once that cycle is complete, I think that’s the point at which you decouple from the monetary system,” he said.
When asked if this represents a path forward for the US, Musk replied: “In this future that I’m talking about, the notion of countries becomes sort of anachronistic.”
He emphasized inevitability over advocacy: “These are just what I think will happen based on what I see, as opposed to these are fundamentally good things, and I’m trying to make them happen. I think this would happen without me, whether I like it or not. As long as civilization keeps advancing, we will have AI and robotics at very large scale.”
