In a recent discussion, Tesla CEO Elon Musk characterized his ventures into the political arena as a “very interesting side quest.” Musk, known as the world’s richest man, significantly invested in former President Donald Trump’s election campaign and created considerable ripples with his initiatives, including the controversial Department of Government Efficiency (DOGE). However, this political engagement ultimately led to a parting of ways with the White House, a shift that many observers anticipated. This split became more pronounced following the introduction of the Oval Office’s “One Big, Beautiful Bill Act,” which Musk claimed undermined DOGE’s efforts aimed at reducing government spending.
As the national debt has surged above $38 trillion, many business leaders, including Musk, have expressed concerns regarding fiscal management in the United States. Economists argue that while national debt is necessary for sustaining the bond market and fostering economic activity, there is heightened anxiety about the escalating interest payments associated with this debt. As of October 2025, maintaining this debt is projected to cost $104 billion, which represents 15% of total federal spending for the fiscal year 2026. In fiscal year 2025 alone, the total interest payments reached a staggering $1.22 trillion.
To manage the burgeoning debt-to-GDP ratio, which is crucial for assessing a nation’s repayment capacity, the government faces two primary options: cutting spending or stimulating economic growth. Musk advocates for the latter, proposing a transformative era fueled by artificial intelligence (AI). In a recent podcast with Nikhil Kamath, he asserted, “As long as civilization keeps advancing, we will have AI and robotics at very large scale,” declaring it perhaps the only viable solution to the U.S. debt crisis. He pointed out that the interest payments on the national debt have surpassed the entire military budget, a trend that he predicts will persist in the short term.
Musk further elaborated on his belief that advancements in AI and robotics could lead to significant deflation due to increased production efficiency. He argued that if goods and services output dramatically rises, it could result in deflation, as the money supply cannot expand at the same rate as production. This perspective aligns with insights from various economists, although many caution that while AI may slow price increases (disinflation), it may not necessarily lead to an outright decrease in prices (deflation).
Prominent financial figures have echoed Musk’s sentiments. Ron Insana, a senior advisor, noted that technological advancements historically result in worker displacement and declining costs for certain goods and services. Likewise, Rick Rieder from BlackRock has suggested that AI could drive down unit costs and enhance output, leading to “disinflationary growth.”
Despite acknowledging that the productivity gains necessary to counteract the current inflation rate of 3% have yet to materialize, Musk remains optimistic. He speculated that within three years, the growth in the output of goods and services could surpass inflation rates, potentially ushering in an era of deflation, which would ultimately lessen the burden of national debt.
