According to Forbes, Elon Musk’s net worth blew past $1 trillion after SpaceX’s IPO — north of $1.3 trillion within days — a figure equal to more than 3% of the entire U.S. economic output.
If we believe in Musk’s business acumen, we should be afraid. In February 2026, he warned that without artificial intelligence and robots, America is “1,000% going to go bankrupt” because nothing else will solve the national debt.
The debt is real. It crossed $39 trillion in March and keeps climbing. The fiscal 2026 deficit exceeded $1.2 trillion by spring. These are genuine problems, and plenty of serious people are worried about them.
But is Musk right? Can America go bankrupt?
Bankruptcy
Bankruptcy is a legal process. Cities can file under Chapter 9. Companies usually use Chapter 11. Individuals often use Chapter 7 or Chapter 13. The federal government can do none of these. There is no bankruptcy chapter for the United States, and no bankruptcy judge has authority to reorganize the federal government’s debts, taxes, spending, or borrowing power.
If the U.S. refused or failed to pay its bills, that would be a default or fiscal crisis, not a bankruptcy case. That is possible, but it would most likely result from political deadlock, legal limits or a deliberate choice rather than the federal government simply running out of dollars.
The difference between a household and the U.S. government is that the U.S. issues the money. A homeowner who loses their paycheck cannot make mortgage payments. The federal government, working through the U.S. monetary system, can create more dollars. Every dollar of federal debt is owed in dollars, and the U.S. is the only entity on earth that issues them. The risk of literally running out of money, with no way to get more, is close to zero.
This is why economists across the spectrum say the same thing: The U.S. cannot go bankrupt the way Musk means it. Not because the debt is acceptable, but because “bankrupt” describes something that cannot happen to a sovereign currency issuer.
Inflation
Ray Dalio, who runs the world’s largest hedge fund, also warned of America’s “debt death spiral,” and said, “There won’t be a default — the central bank will come in, and we’ll print the money and buy it.” This erodes the value of the money itself, but it isn’t bankruptcy.
According to the Federal Reserve Bank of Minneapolis, $100 today buys what about $12 bought in 1970. The dollar bought less every year, yet the government never missed a payment.
That erosion in dollar value, aka inflation, is a real concern for anyone living on a fixed income. It’s also a completely different problem, with completely different answers.
Potato Potahto
Bankruptcy and inflation have different economic mechanisms, but for ordinary Americans, the impact could look much the same.
Musk is right that the national debt is real and growing; the interest alone now runs over a trillion dollars a year. Pedantically, he is wrong to point to bankruptcy as the end result for America, but the outlook may be stark anyway.
Whether consumers face an economic crash or a dollar that buys less and less is moot. Either way, it is wise to plan for the worst and hope for the best.
Whatever you call it, a dollar that buys less is a problem. If you have over $100,000 in savings, consider getting advice from a pro to maximize your chances of growth. SmartAsset offers a free service that matches you to a vetted, fiduciary advisor in under five minutes.
Read the full article here
