Musk says the U.S. is certain to go bankrupt without AI

Musk warns debt will sink country

Elon Musk said the United States is “1,000% going to go bankrupt” without major advances in AI and robotics.

He made the claim during a nearly three-hour interview on the Dwarkesh Podcast on Feb.5, 2026, alongside Stripe co-founder John Collison and host Dwarkesh Patel.

Musk said the national debt is piling up fast and that the country needs enough time to build those technologies before it collapses under the weight.

National debt now tops $38.5 trillion

The numbers back up the urgency. The U.S. national debt stood at $38.56 trillion as of Feb. 4, 2026, according to the Congressional Joint Economic Committee.

That figure is $2.35 trillion higher than one year ago. Over the past year, the debt has grown at an average rate of $6.43 billion per day.

Put another way, the total now amounts to roughly $113,354 per person or $286,108 per household.

Interest costs now rival defense spending

Musk pointed out that yearly interest payments on the national debt now top the military budget. The U.S. spends close to $1 trillion per year just to cover interest on what it owes.

The Congressional Budget Office projects interest will reach about 14.5 percent of federal spending by 2028.

Five years ago, the average interest rate on government debt sat at 1.54 percent. It has now risen to 3.35 percent, more than doubling the cost.

Government still borrows at a fast pace

The borrowing has not slowed down.

The federal government borrowed $696 billion in the first four months of fiscal year 2026, according to the CBO, including $94 billion in January alone.

The Committee for a Responsible Federal Budget says the country is on track for a deficit of $1.8 trillion or more this year. For context, the U.S. ran a $1.83 trillion deficit in fiscal year 2024, so the pace is holding steady.

Debt grew despite promises of cuts

Musk led the Department of Government Efficiency, which aimed to slash federal spending. DOGE initially targeted $2 trillion in savings but later lowered its goal to $150 billion for fiscal year 2026.

Independent reviews by NPR, the New York Times, and others found that DOGE’s claimed savings were far smaller than advertised and contained errors.

Meanwhile, the national debt rose from about $36.1 trillion at President Donald Trump’s inauguration to $38.56 trillion.

Musk sees AI and robots as only fix

Musk argued that technology-driven growth in GDP is the only way to outpace the growing debt. He has previously estimated that advanced robots could become a $10 trillion industry.

His logic is straightforward: if economic output grows fast enough through automation, the debt becomes manageable relative to the size of the economy.

He also acknowledged concern about waste and fraud in government spending as a factor driving the problem.

Other financial leaders sound the alarm

Musk is not alone in his concern.

Billionaire investor Ray Dalio has warned the U.S. is heading toward a “debt death spiral,” a cycle where the government borrows more just to pay interest on existing debt, which then scares off buyers of government bonds.

At Davos in January 2026, Dalio said the country faces a choice between printing money and allowing a debt crisis to unfold. JPMorgan Chase CEO Jamie Dimon has also warned that a crack in the bond market is coming.

Experts say true bankruptcy is unlikely

Here is the twist. Dalio and other economists note the U.S. is unlikely to formally default on its debt because it can print its own currency.

The dollar’s status as the world’s reserve currency lets the government borrow at lower rates than other countries could. The Federal Reserve can also buy government bonds to support demand.

But printing money to cover debts would reduce the dollar’s buying power, effectively making Americans poorer over time.

What a fiscal crisis could look like

The Committee for a Responsible Federal Budget published a January 2026 report outlining six types of fiscal crises the U.S. could face.

Those include a currency crisis where the dollar drops sharply, an inflation crisis fueled by money printing, and an austerity crisis with painful spending cuts and tax hikes.

The report also warned of a gradual crisis in which living standards slowly erode. The CRFB noted the risk of a major fiscal crisis grows as debt climbs.

Dollar’s buying power keeps falling

The dollar has already lost ground. According to the Federal Reserve Bank of Minneapolis, $100 in 2025 buys what $12.06 could purchase in 1970.

The U.S. Dollar Index fell 10.8 percent in the first half of 2025, its worst performance since 1973. A weaker dollar makes imported goods more expensive for American consumers.

If the government resorts to printing money to manage the debt, further erosion in the dollar’s value could follow.

Why it matters for everyday Americans

Rising interest costs on the national debt mean less money available for programs like Social Security, Medicare, and infrastructure.

The CRFB says the Social Security and Medicare trust funds face insolvency within roughly seven years.

Higher government borrowing can push up interest rates across the economy, making mortgages, car loans, and credit cards more expensive for everyone.

If the dollar loses value, the cost of food, gas, and other everyday goods could rise further.

No easy answers in sight

Congress has not agreed on a long-term plan to reduce the deficit. Fiscal year 2026 began with the longest government shutdown in modern history, lasting from Oct. 1 to Nov. 12, 2025.

Mandatory spending on programs like Social Security, Medicare, and Medicaid continues to grow automatically and makes up the largest share of the budget.

Whether AI and robotics can generate enough growth to change the math remains an open question with no consensus among economists.

This article was created with AI assistance and human editing.

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