Rude Awakening Inbound! Elon Musk Says A Recession Is 'Actually A Good Thing'

Recession fears have been growing in the U.S. as the Federal Reserve has tightened its monetary policy. 

Tesla Inc TSLA CEO Elon Musk says the U.S. economy is already in a recession, and it could be "tough going" for 12 to 18 months.  

In a recent Twitter post, a user asked Musk if he still thinks the U.S. is heading for a recession. 

Musk replied that a recession is a necessary part of the economic cycle, also mentioning the impact of the work-from-home culture during the COVID pandemic.  

Yes, but this is actually a good thing. It has been raining money on fools for too long. Some bankruptcies need to happen.

Also, all the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound!

— Elon Musk (@elonmusk) May 27, 2022

Also Read: Elon Musk Says Twitter Refusing To Cough Up Spam Numbers: They're Being 'Very Suspicious'

Another Twitter user asked how long the recession would last, Musk responded that historically a downturn lasts for at least a year.  

Based on past experience, about 12 to 18 months. Companies that are inherently negative cash flow (ie value destroyers) need to die, so that they stop consuming resources.

— Elon Musk (@elonmusk) May 27, 2022

Greg Daco, the chief economist at EY-Parthenon, has warned that the odds of an economic downturn in the U.S. over the next year are somewhere between 35% and 40%. 

"A U.S. recession is unlikely in the near term, but there are several uncertainties on the horizon," Daco wrote.

Photo: Created with an image from Ministerio Das Comanicacoes on Flickr