Elon Musk, the billionaire entrepreneur and now a close advisor to president-elect Donald Trump, has recently intensified his focus on government overspending, advocating for a Dogecoin-inspired solution.
Having hinted at a major shift in the cryptocurrency landscape just last week, Musk has also thrown his weight behind leading Wall Street Bitcoin and crypto advocates as ideal picks for Trump's cabinet.
As speculation mounts that the Trump administration could usher in a crypto-friendly era, Musk's latest critique of the $36 trillion national debt has sparked widespread calls for his DOGE - Department of Government Efficiency - to endorse the Bitcoin Act of 2024.
"America is on a rapid path to de facto bankruptcy," Musk wrote on X, referencing a finance account's warning: "The U.S. government is on pace to spend about $1.4 trillion for interest payments on the $36 trillion in debt during 2025. That will be about 28% of all government revenue going to interest payments."
The U.S. National Debt and Musk's Doge Department
The U.S. national debt, currently exceeding $36 trillion, represents the cumulative borrowing by the federal government to cover deficits when spending surpasses revenue. It is composed of public debt, held by investors and foreign governments, and intragovernmental debt, borrowed from federal trust funds like Social Security. Key drivers include rising mandatory spending on programs like Medicare and interest payments, projected to reach $1.4 trillion by 2025. Historically, debt spikes occurred during wars and crises, such as the COVID-19 pandemic. While deficit spending supports economic growth during downturns, critics warn of fiscal unsustainability, higher borrowing costs, and reduced flexibility for future economic challenges.
Elon Musk's push to curb excessive U.S. spending has led to the formation of the Doge Department of Government Efficiency, which he claims could cut $2 trillion from federal expenditures.
The Doge Department, inspired by the popular Shiba Inu Doge meme tied to the Dogecoin cryptocurrency, reflects Musk's fondness for Dogecoin, which he has called his "favorite" cryptocurrency. Tesla, Musk's company, accepts Dogecoin for payments and holds approximately 10,000 bitcoins, valued at around $800 million, on its balance sheet.
Musk's recent "bankruptcy" warning was highlighted by Senator Cynthia Lummis, a crypto supporter, who responded: "Enter the Bitcoin Act." This bill, introduced in July, proposes establishing a U.S. strategic bitcoin reserve.
The Bitcoin Act and Trump's Vision for Crypto
The Boosting Innovation, Technology, and Competitiveness Through Optimized Investment Nationwide (BITCOIN) Act outlines a plan for the U.S. to purchase 1 million bitcoins over five years as a strategy to lower the national debt.
In response to Musk, the Kraken bitcoin and crypto exchange account commented, "Bitcoin fixes this."
Earlier this year, Trump suggested that bitcoin could be used to "pay off our $35 trillion-hand them a little crypto check, right? We'll hand them a little bitcoin and wipe out our $35 trillion," he remarked.
In July, Trump pledged to establish a "strategic national bitcoin reserve" and forecasted that bitcoin could surpass gold's $16 trillion market capitalization during his speech at the Bitcoin 2024 conference.
