Elon Musk predicts ‘difficulty’, economic turmoil and stock market crash if Trump wins

Brett Arends

Musk’s shocking message of austerity is unusual for voters a week before what is likely to be a close election.

The word “bombshell” has been overused for so long that it’s guaranteed to make anyone roll their eyes. But what other word would be suitable?

With just a week left until the presidential election, Donald Trump’s close ally and chief economic adviser Elon Musk is warning his supporters that if Trump wins, they can expect economic chaos, a stock market crash and financial “hardship” – albeit “temporary.”

This sounds so extreme that Trump fans should either wonder why he was stupid enough to say the silent part out loud, or perhaps hope that the whole story is made up – “fake news.”

But it’s very real.

Billionaire Musk, Trump’s would-be budget-cutting and government efficiency czar, also says there will be “no special cases” and “no exceptions” when he begins cutting federal spending once Trump takes office.

And he predicts that he personally will need “greater security” because of the likely backlash to his political moves.

Speaking on a town hall call with supporters on Tuesday, Musk promised deep federal budget cuts, austerity measures and economic hardship in the new Trump administration.

“We have to cut costs to live within our means,” Musk said. “This will necessarily involve some temporary hardship, but it will ensure long-term prosperity.”

Describing government spending as “a room full of goals,” Musk said, “You can’t miss. Shoot in any direction and you will hit your target.”

He said: “I think that as soon as the elections take place, we will immediately begin to think about where to take the most immediate action.”

And, he added, “obviously a lot of people who use government services are going to be upset about this. I’ll probably need some serious security.”

“Everyone,” he said, will “get their hair cut.”

On his social media platform X, the former Tesla (TSLA) CEO went further and agreed with a supporter who predicted “an initial severe overreaction in the economy” and that “markets will fall.”

“Sounds right,” Musk responded.

Yes.

Trump has already said he wants Musk to head the Commission on Government Efficiency. Trump says the billionaire tech entrepreneur will be his “budget-cutting secretary,” referring to a possible Cabinet position. Musk himself has described his future role as head of the “Department of Government Effectiveness”, although he admits that the name is a joke: the acronym stands for DOGE, the name of a cryptocurrency he has often referred to over the years.

Musk’s shocking message of austerity is unusual for voters a week before what is likely to be a close election.

Especially when America is prospering.

The labor market is rising so strongly that it has confused the Federal Reserve, which became worried a month ago and cut interest rates to prevent a slowdown that never happened. Economic growth in the third quarter was an impressive 3%. The latest inflation data, while higher than expected, still shows a sharp decline from the post-pandemic peak. Inflation-adjusted average weekly wages are now (slightly) higher than before COVID-19.

Meanwhile, investors in the S&P 500 SPX have gained 54%, including dividends, since the Biden administration took office, or 30% after subtracting inflation. And the International Monetary Fund says the US has the best large economy in the world.

It’s not the usual picture of a politician and his campaign promising austerity, deprivation, deep budget cuts, a likely economic “overreaction” and a stock market slump. Usually such proposals are heard during times of deep crisis, when desperate times supposedly call for desperate measures.

Instead, Musk’s program is like your new family doctor promising a big dose of brutal chemotherapy when you’ll be completely healthy and cancer-free.

It hardly helps that Trump and Musk are billionaires themselves and will not experience any of the hardships predicted for ordinary Americans. Musk, whose net worth is estimated at $270 billion, is the richest person in the world.

See: DJT Triple in October Adds $4 Billion to Trump’s Coffers

Musk told supporters the measures were necessary because of the skyrocketing federal debt crisis.

He compared the US to an individual, although a country that controls its own currency cannot go bankrupt due to debts to itself. At one point he said the costs had “bankrupted the company” before correcting himself and saying “country”.

Musk did not address Trump’s proposed tax cuts, which the Committee for a Responsible Federal Budget says would increase the national debt by about twice as much as Democratic rival Kamala Harris’ proposals. Musk’s concerns about the growing national debt have been entirely focused on cutting spending.

Musk also said cutting federal spending is necessary to reduce inflation, although it has already fallen to 2.4%.

The Trump campaign did not immediately respond to requests for comment.

Wall Street economists warn that Trump’s tax cuts and tariffs will lead to more inflation than Harris’ proposals.

As reported here on MarketWatch just one day ago, Musk’s brutal budget-cutting math is far more serious than most Americans, including most MAGA fans, realize. Two-thirds of the entire federal budget already goes to Social Security, Medicare, interest payments, defense and veterans. (Note that this does not include Medicaid.)

Everything else (including Medicaid) will be $2.35 trillion this year. So Musk’s promise to cut “at least $2 trillion” from the federal budget either means he’s going to eliminate virtually everything else—Medicaid, transportation, justice, homeland security, agriculture, the Food and Drug Administration, and so on— or he’s going to cut Social Security and Medicare.

Or, as Musk put it, when it comes to cutting federal programs, “there will be no special cases… no exceptions.”

-Brett Arends

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