Elon Musk agrees that $2T budget cuts would severely hit economy in the short term
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Elon Musk seems to agree that his pledge to help Donald Trump slash at least $2T from the U.S. federal budget could cause severe economic turmoil in the short term.
Musk announced the pledge at Trump’s campaign rally in Madison Square Garden on Sunday. Trump previously said he would appoint Musk to lead a government efficiency department if he’s elected president.
An X user said mass deportations and steep budget cuts under Trump would cause an “initial severe overreaction in the economy” before a “rapid recovery to a healthier, sustainable economy.”
“Sounds about right,” Musk responded.
The $2T cuts exceed how much Congress spends yearly on federal agency operations like defense. The U.S. government spent over $6.75T in FY 2024.
While Musk did not reveal a timeline for the budget cuts or which departments would be affected, about one-third of all federal spending would need to be eliminated to reach his target in a year.
To note, Musk’s companies like Tesla (TSLA) and SpaceX (SPACE) have secured federal contracts worth billions of dollars and have also benefited from electric vehicle tax credits and infrastructure investments.
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