Elon Musk, CEO of Tesla and notable supporter of U.S. president-elect Donald Trump, has recently voiced significant concerns over the mounting U.S. debt, calling it a “financial emergency.” This warning comes as both bitcoin and dogecoin experience price surges, with dogecoin outperforming bitcoin, bolstered by Musk’s endorsement of the Department of Government Efficiency, colloquially known as “Doge.”
Concerns Over National Debt
Musk has described the U.S.’s $35 trillion debt as “unsustainable,” stressing that excessive government spending could push the country toward bankruptcy. He expressed these concerns on X (formerly Twitter), the social media platform he acquired and rebranded, responding to Kentucky Senator Rand Paul’s statement that “the status quo of $2 trillion annual deficits is unsustainable.”
Senator Paul, a known bitcoin proponent who accepted bitcoin donations during his 2015 presidential campaign, has argued that cryptocurrencies could eventually replace the U.S. dollar, citing decreasing trust in the dollar and increased governmental oversight as key reasons. This echoes concerns about the U.S. national debt, which surpassed $34 trillion in early 2024, spurred by Covid-19 pandemic stimulus measures that led to significant inflation and subsequent interest rate hikes by the Federal Reserve.
Trump's Bitcoin Proposals
Earlier in the year, Trump suggested the possibility of using bitcoin to address the U.S. debt, jokingly mentioning a plan to “hand them a little bitcoin check” to manage the $35 trillion deficit. In July, he announced intentions to establish a “strategic national bitcoin reserve” and speculated that bitcoin could surpass gold’s market capitalization of $16 trillion during the Bitcoin 2024 conference.
Musk's Initiative and Dogecoin's Growth
Musk’s campaign to address excessive spending has fueled support for the creation of the Doge Department of Government Efficiency, which he claims could potentially reduce U.S. spending by $2 trillion. This proposed department references the popular shiba inu meme, also associated with dogecoin, a cryptocurrency Musk has frequently called his “favorite” and which Tesla has accepted as payment.
The recent association between Musk’s financial efficiency initiatives and dogecoin has led to a significant increase in its price, which more than doubled over the past month. This surge prompted billionaire Mark Cuban to humorously suggest that Musk might consider using dogecoin as part of the U.S. Treasury strategy.
Conclusion
As discussions continue about potential strategies to tackle the national debt, Musk’s warnings and Trump’s bitcoin-related proposals have added to the growing conversation around alternative financial solutions and the role cryptocurrencies could play in future economic policies.