Elon Musk: America is ‘1,000% going to go bankrupt’ and ‘fail as a country’ — but he says one powerful force can save us

“We are 1,000% going to go bankrupt as a country and fail as a country, without AI and robots,” he said (1). “Nothing else will solve the national debt.”

According to the Treasury Department, U.S. national debt now stands at roughly $40.17 trillion — and it continues to grow as federal spending outpaces revenue (2). Through the first nine months of fiscal year 2026, the federal deficit has climbed to around $1.37 trillion (3).

Without a productivity breakthrough from artificial intelligence and robotics, Musk argues that the country is “actually totally screwed because the national debt is piling up like crazy.” That’s a bleak picture.

He also warned that the cost of servicing that debt alone is becoming a heavy burden.

“The interest payments on national debt exceed the military budget, which is a trillion dollars. So we have over a trillion dollars just in interest payments,” he said.

How the Iran war has rapidly increased the national debt

And those costs could rise further. By mid-year, the U.S. spent about $37.5 billion on the war in Iran so far, according to the Pentagon (4). And that cost could go much higher.

Back in April, public policy expert Linda Bilmes estimated the war will cost Americans upwards of $1 trillion (5).

“The result is that the interest costs alone will add billions of dollars to the total cost of this war,” Bilmes noted in an interview with the Harvard Kennedy School. “And unlike the upfront costs, these are costs we are explicitly passing on to the next generation.”

These costs could climb as high as $1.5 trillion, given President Donald Trump’s proposed 2027 defense budget. That’s the largest year-over-year jump in military spending since the end of World War II (6).

According to the Committee for a Responsible Federal Budget, the plan could add about $5 trillion to defense spending through 2035. Once interest costs are factored in, that figure could push the national debt up by roughly $5.8 trillion (7).

And then there’s the One Big Beautiful Bill Act (OBBBA). The Committee for a Responsible Federal Budget estimates OBBBA will add $4.2 trillion to the national debt by fiscal 2034, or $4.7 trillion through 2035 — if you take into account the bill's dynamic effect on the economy (8).

Others are sounding the alarm

Musk isn’t the only one concerned about America’s debt and the soaring interest costs tied to it. Ray Dalio, founder of the world’s largest hedge fund, Bridgewater Associates, has warned that the U.S. is heading toward a “debt death spiral,” where the government must borrow simply to pay interest — a vicious cycle that feeds on itself.

But unlike Musk, Dalio doesn’t foresee a formal bankruptcy.

“There won't be a default — the central bank will come in and we'll print the money and buy it,” he said. “And that's where there's the depreciation of money.”

JPMorgan CEO Jamie Dimon has also warned that rising government debt and deficits could eventually trigger “some kind of bond crisis” if policymakers fail to address the problem (9).

In other words, the government may never technically run out of dollars — but those dollars can lose value fast. Musk has cautioned in the past that if current trends continue, “the dollar’s going to be worth nothing.”

That erosion in the value of the dollar is already visible. According to the Federal Reserve Bank of Minneapolis, $100 in 2026 has the same purchasing power as just $11.61 did in 1970 (10).

The good news? Savvy investors have long found ways to protect their wealth — even when Washington’s fiscal math stops adding up.

Why diversification shines in chaotic economic times

To shock-proof your investments, Dalio emphasized the value of diversification — and highlighted one time-tested asset in particular.

“People don't have, typically, an adequate amount of gold in their portfolio,” he said. “When bad times come, gold is a very effective diversifier.”

Gold has long been considered a go-to safe haven. It can’t be printed out of thin air like fiat money and because it’s not tied to any single currency or economy, investors often flock to it during periods of economic turmoil or geopolitical uncertainty, driving up its value.

Gold prices have climbed nearly 121% over the past five years months (11). And now, despite an early slump in 2026, forecasting from the Bank of Montreal (12) and TD Securities (13) both estimate that the precious yellow metal could return to at least $5,000 per ounce by the first quarter of 2027.

Gold’s durability has continued to draw attention from Wall Street. Dimon went as far as to say the metal could “easily go to $5,000 or $10,000 in environments like this,” adding that “this is one of the few times in my life it’s semi-rational to have some in your portfolio (14).”

One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of American Hartford Gold.

Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account — combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an option for those looking to potentially hedge their retirement funds against economic uncertainties.

Even better, you can often roll over existing 401(k) or IRA accounts into a gold IRA without tax-related penalties. To learn more, get your free information guide on investing in precious metals.

Even better, qualifying purchases can also receive up to $25,000 in free silver.

How real estate can help soften the blow

Gold isn’t the only asset investors turn to during periods of inflation. Real estate has also proven to be a powerful hedge.

When inflation rises, property values often increase as well, reflecting the higher costs of materials, labor and land. At the same time, rental income tends to go up, providing landlords with a revenue stream that adjusts for inflation.

Over the past ten years, the S&P Cotality Case-Shiller U.S. National Home Price NSA Index has jumped by more than 88%, reflecting strong demand and limited housing supply (15).

But the same housing boom that helped many existing homeowners build wealth has also made buying a home harder for millions of Americans. Home prices remain historically high compared with incomes, while higher mortgage rates have pushed monthly payments sharply higher and forced some would-be buyers to wait.

Of course, high home prices can make buying a home more challenging, especially with mortgage rates still elevated. And being a landlord isn’t exactly hands-off work — managing tenants, maintenance and repairs can quickly eat into your time (and returns).

The good news? You don’t need to buy a property outright — or deal with leaky faucets — to invest in real estate today.

Arrived, a real estate platform company backed by investors such as Jeff Bezos, helps investors get into SEC-qualified investments in real estate, including rental homes, vacation rentals and diversified funds.

In addition to any property appreciation, Arrived’s properties can help you earn a passive income stream without any of the extra work that comes with being a landlord. No midnight maintenance calls over burst pipes required.

All you have to do is sign up, then you can view a selection of vetted properties and start investing with just $100. That way, you can make sure the platform is right for you.

Once you become an investor with Arrived, you’ll have access to more than 596 properties in 67 plus markets. Once a property is fully funded, you can also take advantage of Arrived’s secondary market after six months if you want to reshuffle your portfolio.