Tesla CEO and X owner Elon Musk gestures on stage during a rally for Republican presidential nominee and former US President Donald Trump at Madison Square Garden
Credit: Reuters Photo
Elon Musk, the world’s richest man, has become perhaps the most prominent business backer of Donald Trump’s campaign. But even he has doubts that the former president’s economic plans will swiftly supercharge the United States economy.
Trump has called for mass deportations of immigrants living in the US illegally, an extension of his 2017 tax cuts and an array of additional tax cuts. He is also promising blanket tariffs on all imports.
Budget experts have estimated these policies could cost as much as $15 trillion over a decade, although Trump says that economic growth and eliminating government waste would easily cover those costs.
But Musk realizes that it will not be so simple.
As part of his endless stream of replies to fans on his social media platform that go late into the night, Musk replied to a pseudonymous account early Tuesday morning that posited that there would be an “initial severe overreaction in the economy” and that the “market will tumble” if Trump is elected and follows through on his plan. Afterward, the account said, “There will be a rapid recovery to a healthier, sustainable economy.”
Musk replied at 1:46 a.m. with three words: “Sounds about right.”
Musk’s words on the economy matter given that Trump has said he would appoint the billionaire to oversee a new “government efficiency commission” focused on cutting spending if the former president wins Nov. 5.
Musk has acknowledged that cutting government spending could be painful. At a telephone town hall Friday evening, Musk proactively brought up the consequences of this austerity when a voter asked him for his first steps to cut the nation’s debt should he be appointed to Trump’s promised government-efficiency commission.
He said that cutting spending would be relatively easy given the amount of government waste, vowing there would be “no exceptions,” and that the tax law should be simplified to remove loopholes.
“But most importantly, we have to reduce spending to live within our means. And that necessarily involves some temporary hardship, but it will ensure long-term prosperity,” Musk said at the conclusion of his answer. He did not expand on the hardship.
Musk did not immediately respond to a request for comment. The Harris campaign seized on the remarks Tuesday, calling them evidence that Trump would mismanage the economy.
Musk, owner of the social platform X, has said that he plans to play a key role in a Trump administration focused on budget cuts and government efficiency, and he has met in recent weeks with Howard Lutnick, the co-chair of Trump’s transition team, to discuss the matter. Trump has privately told Musk that he wants the entrepreneur to slash costs of the government just as he did at X.
Trump has said little about how he would scale back spending. He has called for rolling back much of the Inflation Reduction Act that Democrats passed in 2022, describing its tax incentives to combat climate change as wasteful. However, Trump has pledged not to enact cuts to social safety net programs such as Social Security or Medicare, which are the biggest drivers of the nation’s nearly $36 trillion in debt.
“We’re all about growth,” Trump said at the Economic Club of Chicago this month, adding that his mix of tax cuts and tariffs would force companies to invest in manufacturing in the United States.
Economists have been deeply wary of Trump’s economic plans.
An analysis published last month by the nonpartisan Peterson Institute for International Economics projected that Trump’s policies would increase inflation and slow economic growth. They found that his plans would be particularly damaging to U.S. manufacturing and agriculture, particularly if American trading partners responded with their own higher tariffs.