Elon Musk and U.S. President Donald Trump have been locked in a public feud over his administration's sweeping tax-cut bill.Carlos Barria/Reuters
It hurts to say it, but Elon Musk is right.
Mr. Musk, you just might have heard, is locked in a furious quarrel with Donald Trump. Until recently, the world’s richest man and the world’s most powerful one were enthusiastic members of a mutual admiration society. Mr. Musk spent almost US$300-million supporting Mr. Trump and his fellow Republicans in the 2024 election campaign. Once Mr. Trump was returned to office, he made the billionaire one of his closest advisers.
When Mr. Musk’s association with the Trump administration proved to be burning down his electric-vehicle business, the President of the United States of America even put a bunch of Teslas on display at the White House, climbing into one and exclaiming, “Wow!” Mr. Musk joked that he had become “first buddy.”
It was never going to last. There is only room in the White House for one obnoxious egomaniac. The only questions were when and how the bromance was going to end.
As it happened, the breakup was over government spending. Mr. Trump is hoping to get a budget package through Congress. He calls it a “big, beautiful bill.” Mr. Musk calls it an abomination. Actually, a “disgusting abomination.”
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This week, Mr. Musk poured contempt on those who got the “massive, outrageous, pork-filled” legislation through the House of Representatives last month (it still has to clear the Senate). “Shame on those who voted for it: you know you did wrong. You know it,” he said on X, his social media platform.
Shame indeed. The bill raises spending on armaments and border security while extending deep tax cuts passed in Mr. Trump’s first term. The result promises to be heaps of extra borrowing by a federal government that is already up to its chin in debt.
The non-partisan Congressional Budget Office says the bill could add US$2.4-trillion to budget deficits over the next decade. Yes, trillion with a T.
At the turn of the century, the United States had a balanced budget and a debt about a third the size of its economic output. Now, it runs deep deficits every year, and its debt roughly equals its GDP. The government spends more on interest payments than on its armed forces. That means it has less money on hand for things such as caring for an aging population and coping with pandemics, wars or recessions.
SpaceX's government contracts are at risk as Mr. Musk and Mr. Trump feud publicly over the administration's spending plans.
Reuters
It can’t go on like this forever. Moody’s has already downgraded the U.S. credit rating, forecasting that the federal debt will reach 134 per cent of GDP by 2035. A fiscal crisis in Washington could undermine faith in the U.S. dollar and disrupt the global trading network, which is already being threatened by Mr. Trump’s tariffs.
The United States used to spend generously in bad times and trim its spending in good. Now, it overspends all the time, even when the economy is solid and unemployment low, as they are at present. Parties of both the left and the right are big spenders. The Democratic administration of Joe Biden ramped up spending enormously. Now, Mr. Trump’s Republicans are preparing to outdo him.
As Mr. Musk hurried to point out in his social media war with the Trump crowd, key Republican figures, such as House Speaker Mike Johnson, once raged against out-of-control spending. So did Mr. Trump himself. Now they seem quite willing to pass on a mountain of debt to future generations, a willingness they appear to share with most Canadian political leaders of recent years.
Mr. Musk deserves zero credit for his rebellion. He should have known that Mr. Trump had no real interest in budget matters and no real intention of putting the country’s finances in order. Creating a Department of Government Efficiency and putting Mr. Musk in charge made nice headlines and might even have made a difference, but it turned into a fiasco, marked by mass layoffs, inflated claims and cruel foreign-aid cuts.
Analysis: For Trump and Musk, breaking up wasn’t all that hard
More to the point, Mr. Musk should have known that a re-elected, empowered, unhinged Donald Trump posed an enormous danger. The Tesla CEO and SpaceX founder is, after all, a famously intelligent, enormously successful businessman. And yet, he leapt on the Trump bandwagon with all the fervour of a MAGA nut at a weekend rally. His endorsement and his money may even have tipped a close election to Mr. Trump, as Mr. Musk himself boasted after their noisy split. It is a bit late for him to discover that his buddy is a blustering fool.
But on this at least he is right: The United States has a spending problem, and that’s a problem for us all.