Elon Musk Declared ‘Financial Emergency’; How US’ Debt Reached A Whopping $35.7 Trillion

Tesla CEO Elon Musk has issued warning regarding what he describes as a “financial emergency” in the United States. He highlighted that government interest payments have surged to over $1 trillion annually, now exceeding the entire budget allocated to the Defence Department.

Speaking at a recent Trump campaign rally, Musk pointed out that these interest payments account for 23% of all federal tax revenue, with the national debt reaching a staggering $35.7 trillion, The Times Of India reported. Analysts at Bank of America project that the debt could hit $36 trillion by the end of the year, increasing at an alarming rate of approximately $1 trillion every 100 days.

Reason Behind National Debt Reaching $35.7 Trillion

The rapid accumulation of debt is largely attributed to the COVID-era stimulus measures, which have been significant contributors to inflation. This has compelled the Federal Reserve to implement historic interest rate hikes. Current projections suggest that deficits will continue to rise, with analysts estimating annual increases of between $500 billion and $600 billion under various policy scenarios.

This escalating debt crisis has led to a flight towards alternative assets, pushing both Bitcoin and gold to near-record levels. Bitcoin has approached its all-time high of $70,000, as investors increasingly consider it to be “digital gold” amidst growing inflation concerns. Renowned investor Paul Tudor Jones, who previously referred to Bitcoin as the “fastest horse to beat inflation,” has reiterated his warnings about a looming “debt bomb,” attributing it to what he terms “fiscal recklessness.”

The situation has created what analysts are calling a “nightmare scenario” for the Federal Reserve, which faces the daunting task of controlling inflation while managing substantial government obligations. Notably, Tesla has significant exposure to the cryptocurrency market, holding approximately 10,000 Bitcoin valued at around $800 million on its balance sheet. The company recently transferred its Bitcoin holdings to new wallets, prompting speculation regarding potential sales.