Elon Musk warns that delaying debt-limit increase worsens matters.

Elon Musk Warns Against Delaying Debt Ceiling Raise

Consequences Will Only Get Worse, Says Musk

Industrialist Elon Musk has warned that delaying the raising of America’s debt ceiling will only make the consequences worse. In a tweet on May 8, Musk stated, “In the end, all debts must be paid, just a question of when. Later makes it worse.” He was responding to a tweet about Treasury Secretary Janet Yellen’s warning that any failure to raise the national debt limit could result in economic chaos.

Additional Debt is a Crisis Itself

The Kobeissi Letter, an industry-leading commentary on the global capital markets, also warned that taking on additional debt “is a crisis itself.” Since 2008, the United States has added $22 trillion in debt, $8 trillion of which has been accumulated since 2020. It had taken the country 230 years to add its first $8 trillion in debt.

U.S. Debt Estimated to Hit $50 Trillion

Within the next 10 years, total U.S. debt is estimated to hit $50 trillion with annual interest expense well over $1 trillion. Soon, interest will be the U.S. government’s largest expense. Each time the debt ceiling is raised, the crisis gets worse. We need a sustainable solution, warns The Kobeissi Letter.

Breaching the Debt Ceiling

In a May 1 letter to House Speaker Kevin McCarthy, Yellen revealed that the Treasury would be unable to continue satisfying the government’s financial obligations “potentially as early as June 1” in case Congress does not raise the debt limit. “We have learned from past debt-limit impasses that waiting until the last minute to suspend or increase the debt limit can cause serious harm to business and consumer confidence, raise short-term borrowing costs for taxpayers, and negatively impact the credit rating of the United States,” the letter said.

U.S. Debt: By the Numbers

• The current debt limit is $31.4 trillion, which was hit in January 2021.
• The net interest expense on U.S. debt in 2022 was approximately $475 billion, which comes to around 10 percent of the nation’s tax revenue.
• The United States has added $22 trillion in debt since 2008, $8 trillion of which has been accumulated since 2020.
• Total U.S. debt is estimated to hit $50 trillion within the next 10 years.

The United States is only a few weeks away from breaching the debt ceiling. It’s time for Congress to take action and find a sustainable solution to this ongoing crisis.