The Treasury’s monthly budget statement released on Monday underscored the daunting burden of interest servicing the U.S. is grappling with, prompting a reaction from Tesla CEO Elon Musk on social media.
What Happened: The interest on the debt for the fiscal year-to-date period stands at $357 billion, marking a 37% increase year-over-year, as highlighted by the user in the post. The fiscal year for the government starts on Oct. 1 and ends on Sept. 30.
The user pointed out that the interest burden exceeds the outlays for military spending or any other item, except Social Security or the Department of Health and Human Services. According to data from the Department of Defense website, the outlay for the sector for the fiscal year 2024 is $275 billion.
“Interest on the debt is on track to cost $1.1 trillion this FY, while Treasury still projects $1.0 trillion – insane!” the user exclaimed.
Another user chimed in, expressing concerns that at this rate, interest expense will rise to $3 trillion annually in less than a decade, potentially becoming the largest item in the entire budget.
“The Fed will be forced to print money to pay for it, and inflation will go to the moon,” they added.
Musk joined the conversation, stating, “US national debt growth is unsustainable.”
See Also: Best Inflation Stocks
Why It’s Important: This isn’t the first time Musk has voiced concerns about the U.S. national debt, which is currently at over $34 trillion. In September, when the national debt exceeded $33 trillion, he had expressed displeasure over it.
In January, Black Swan author Nassim Nicholas Taleb warned of the U.S. fiscal deficit swelling to a point that it would take a miracle to reverse the damage, Bloomberg reported.
“So long as you have Congress keep extending the debt limit and doing deals because they're afraid of the consequences of doing the right thing, that's the political structure of the political system, eventually you're going to have a debt spiral.”
Taleb reportedly called the ballooning debt load a “white swan,” suggesting that it is a risk that's more probable than a surprise “black swan” event.
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