'Basically unfixable': Elon Musk says AI is the only way to end America's $39T nightmare. Why he thinks the US is 'toast'

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Tesla CEO Elon Musk had quite a ride heading the Department of Government Efficiency (DOGE) — an initiative designed to slash federal waste fraud, and abuse across the government.

Speaking at the All In Summit in September, Musk described his stint in Washington as “a hell of a side quest” and didn’t hold back when asked what he’d learned (1).

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“The government is basically unfixable,” he declared, drawing laughter — and then applause — from the audience.

According to DOGE’s website, the initiative racked up an estimated $214 billion in savings, though critics have questioned the math (2). Musk says the big problem is America’s ballooning debt — which currently amounts to $38.99 trillion (3).

“It’s good to have talented people in the administration. But at the end of the day, if you look at our national debt, which is insanely high, the interest payments exceed the Defense Department — I guess, sorry, War Department budget — and they keep rising,” he said.

The numbers back him up. Treasury data show the U.S. paid $1.22 trillion in net interest in fiscal 2025 (4).

President Trump’s is pushing for a $1.5 trillion defense budget in FY2027 — a proposal that could swell the national debt by about $5.8 trillion, including interest, through 2035, according to estimates from The Committee for a Responsible Federal Budget (5).

That reality underpins Musk’s stark warning: “So if AI and robots don’t solve our national debt, we’re toast.”

Musk’s trillion-dollar AI vision

But Musk isn’t just talking about AI — he’s investing heavily in it.

In February, the billionaire announced in a blog post that SpaceX had acquired xAI, ahead of a potential IPO later this year (6).

The combined business unites rockets, Starlink satellites, social platform X, and the Grok AI chatbot under one umbrella — with an estimated valuation of around $1.75 trillion (7).

Musk says the long-term plan revolves around a surprising idea: building AI data centers in space.

“Current advances in AI are dependent on large terrestrial data centers, which require immense amounts of power and cooling. Global electricity demand for AI simply cannot be met with terrestrial solutions, even in the near term,” Musk wrote in a statement.

“Space-based AI is obviously the only way to scale.”

The AI super cycle

Artificial intelligence might not just reshape the economy — it could be the only thing standing between America and bankruptcy, according to Musk.

Speaking with podcaster Dwarkesh Patel, Musk warned that without a massive productivity boom from AI and robotics, the U.S. could eventually collapse under its national debt (8).

“We are 1,000% going to go bankrupt as a country, and fail as a country, without AI and robots,” Musk said, adding, “Nothing else will solve the national debt. We just need enough time to build the AI and robots to not go bankrupt before then.”

Musk has made similar arguments before. In a conversation last November with entrepreneur Nikhil Kamath, he said AI could dramatically increase the output of goods and services — potentially pushing prices lower (9).

“If you have AI and robotics, and a dramatic increase in the output of goods and services, probably you will have deflation. That seems likely because you simply won’t be able to increase the money supply as fast as you increase the output of goods and services.”

But the same technology driving productivity could also threaten millions of jobs.

A recent analysis from Citrini Research explored how widespread automation could eliminate white-collar roles (10). If that happens at scale, fewer workers could mean lower tax revenue — and weaker consumer spending.

Early signs of that shift may already be showing up.

Fintech company Block, Inc. — founded by Jack Dorsey — recently slashed about 40% of its workforce, saying AI tools allow a smaller team to do more.

‘Debt death spiral’

Musk isn’t the only billionaire sounding alarms. Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has long cautioned that America is heading toward a “debt death spiral,” where the government must borrow simply to pay interest — a vicious cycle that accelerates over time.

Dalio doesn’t expect an outright default, but he sees another danger: currency erosion.

“There won’t be a default — the central bank will come in, and we’ll print the money and buy it,” he said in an interview with CNBC. “And that’s where there’s the depreciation of money.” (11)

The dollar’s shrinking buying power is familiar to Americans. According to the Federal Reserve Bank of Minneapolis’s inflation calculator, a $100 bill today has about the same purchasing power as $12 in 1970.

A timeless hedge

Dalio recommends a classic safeguard: gold.

“People don’t have, typically, an adequate amount of gold in their portfolio,” he told CNBC. “When bad times come, gold is a very effective diversifier.”

Unlike fiat currencies, gold can’t be printed at will by central banks or governments. It’s also widely regarded as the ultimate safe haven. Gold is not tied to any one country, currency or economy, and in times of economic turmoil or geopolitical uncertainty, investors often flock to it — driving prices higher.

Even though gold prices have pulled back recently, the metal remains a popular safe haven during periods of economic uncertainty. Over the past year, the price of gold has surged more than 57%, far outpacing the roughly 12.8% gain in the S&P 500 Index (12).

How to open a gold IRA

A gold IRA is one option for building up your retirement fund with an inflation-hedging asset.

Opening a gold IRA with the help of Goldco allows you to invest in gold and other precious metals in physical forms while also providing the significant tax advantages of an IRA.

With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver.

If you’re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today.

Musk’s advice

Like Dalio, Musk has also shared thoughts on how Americans can protect themselves if the dollar is losing value.

“It is generally better to own physical things like a home or stock in companies you think make good products, than dollars when inflation is high,” he wrote on X back in 2022 — shortly before U.S. inflation spiked to a 40-year high (13).

Musk may have a point about physical assets. Consider this: the S&P CoreLogic U.S. National Home Price Index tracks single-family home prices in the U.S., and has climbed nearly 50% over the past five years (14).

Real estate is widely considered a long-term hedge against inflation. As the cost of materials, labor and land rises, home values often increase in tandem. Rental income also tends to move higher, providing landlords with a cash flow that adjusts with inflation.

Earn money as a landlord — without the stress

The good news is, these days you don’t even need to buy a house outright to benefit from real estate investing.

mogul is a real estate investment platform offering fractional ownership in blue-chip rental properties, which gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or 3 a.m. tenant calls.

Their team hand-picks the top 1% of single-family rental homes nationwide for you. Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average yearly return of 18.8%.

Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours, with investments typically ranging between $15,000 and $40,000 per property.

Getting started is a quick and easy process. You can sign up for an account and then browse available properties. Once you verify your information with their team, you can invest like a mogul in just a few clicks.

Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives you access to single-asset multifamily and industrial deals.

Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.

‘Stock in companies’

Musk also highlighted that stocks can be a smarter alternative to holding cash when inflation is high.

True as it may be, his statement naturally raises a question — how do you choose the right companies?

One of the world’s most respected investors, Warren Buffett, offers a straightforward answer: skip the stock picking and simply own the S&P 500.

“In my view, for most people, the best thing to do is own the S&P 500 index fund,” Buffett has famously stated (15).

This approach gives investors exposure to 500 of America’s largest companies across a variety of industries, providing better diversification than individual stocks.

How to invest in the S&P 500

The beauty of this approach is its accessibility — anyone, regardless of wealth, can invest in ETFs like the S&P 500. Platforms like Stash make this incredibly straightforward.

With over 1 million active subscribers and more than $5 billion in assets under management, the intuitive app lets you set daily, weekly, or monthly recurring investments that actually match your cash flow.

You can build a diversified portfolio in just a few clicks using its award-winning Smart Portfolio, which adjusts your investment mix based on your goals and risk level. Prefer a more hands-on approach? You can also choose your own stocks and ETFs, or mix both depending on your comfort level.

And if you’re looking to take your long-term strategy a step further, a Stash+ subscription offers 3% IRA matching, that can give your contributions a meaningful boost over time.

You can set up a recurring deposit in just a few minutes and let your portfolio work for you on autopilot.

Plus, you can get a $25 bonus investment when you fund a new Stash account with $5, plus a 3-month trial to explore the platform.*

*All investments are subject to risk and may lose value. View important disclosures. Offer is subject toT&Cs.

But passive investing isn’t for everyone.

One of the easiest ways to invest is to open a self-directed trade account with SoFi. This DIY approach allows you to invest with no commission fees, plus, for a limited time, you can get up to $1,000 in stock when you fund a new account.

SoFi is designed to help you learn investing as you go, with real-time investing news, curated content and the data you need to make smart decisions about the stocks that matter most to you.