The world’s richest businessman Elon Musk has warned America of a debt crisis. He said, “25% of the US government’s income is going towards interest on the debt. If this continues, the situation will be such that the government will have money only to pay the interest. Nothing will be left for important things like social security, medical, defense.” Musk had also recently said that wasteful bills like ‘One Big Beautiful Bill Act’ are increasing this debt further. He alleged that the Parliament is making the country bankrupt. Why is Musk’s social media post warning America of a debt crisis, understand in 7 questions… Question 1: How much is America’s debt and how much interest is it paying? Answer: Elon Musk quoted an account named Wall Street Mav in his post, which said that America’s debt has reached 36.9 trillion dollars i.e., about 3200 lakh crore rupees. According to the World of Statistics… America has to pay $1.2 trillion in interest every year, that is, about Rs 103 lakh crore. This amount is more than the Defense Department’s budget of $1 trillion. Musk also said this in the All In podcast in September 2024. Question 2: If this continues, how much can it be in the coming years? Answer: Billionaire investor Ray Dalio said that in the next 10 years, America’s debt could reach $50-55 trillion, which would be 6.5-7 times its earnings. He said that America’s rising debt could cause an ‘economic heart attack’. Moody’s also said that if this continues, the debt will be 140% of GDP by 2035, which was 98% in 2024. If Trump’s tax policy remains intact, the situation will get worse. At the same time, the Congressional Budget Office said that by 2055 the debt will be 156% of GDP. Debt-to-GDP ratio tells how much debt a country has compared to its annual income (GDP). It is shown in percentage. Suppose a country’s debt is Rs 100 and its annual income is Rs 50, then the debt-to-GDP ratio will be 100/50 = 200%. That is, the debt is twice the income. Question 3: What will be the effect of increasing debt on America’s people? Answer: According to the Bipartisan Policy Center, due to the increase in debt, the interest cost will increase so much that the government will not have money left for important programs like Social Security, Medicare, Defense. According to the Council on Foreign Relations, the interest cost has become more than Medicaid. Question 4: Why is America’s debt increasing so much? Answer: US Treasury Fiscal Data shows that the government’s expenses are more than the income. When the expenses are more, the government has to take loans. Question 5: What is the government doing to stop this? Answer: The Trump government presented a budget in May 2025, in which there is a plan to cut $ 163 billion i.e. about Rs 14 lakh crore. There will be cuts in education, health, housing and labor programs. There is a proposal to reduce the budget of the State Department by $ 26.5 billion (about Rs 2.28 lakh crore) and NOAA by $ 1.5 billion (Rs 0.13 lakh crore). But many organizations have opposed it, especially regarding the cut in funding for students. Question 6: Why did Musk criticize the ‘One Big Beautiful Bill Act’? Answer: This bill talks about increasing the tax cuts of 2017 and increasing spending on military and border security. Musk said in X post on June 3 that this bill will increase the budget deficit to $ 2.5 trillion i.e. about Rs 215 lakh crore. Musk wrote in his post, I can’t bear it anymore. This bill is huge, absurd and full of wasteful expenses. Those who voted in its favour should be ashamed. In another post, Musk said that in November next year, we will remove all those politicians who have betrayed the public. Question 7: What percentage of GDP debt is considered appropriate for a country? According to Moody’s, if the debt is more than 60%, the country faces difficulty in paying interest, and economic stability is endangered. The 60% ratio is considered appropriate because it allows the country to spend a large part of its earnings in areas such as development, health, and defense without spending a large part of its earnings on repaying debt. If this ratio increases, as it is currently 123% in the US, then the interest burden increases, and the government has less money left for essential expenses. However, some economists say that developed countries such as the US or Japan (whose ratio is 266%) can bear more debt because their currency and economy are strong.
