Elon Musk agrees: Trump’s economic plans will lead to ‘hardship’ and cause markets to ‘tumble’

The former president’s wealthy allies are promoting the idea of economic collapse and high prices as a necessary side effect of Trump’s economic agenda

The world’s wealthiest man appears to believe that a Donald Trump presidency must crash the economy in order to benefit Americans.

Elon Musk agreed on Tuesday that proposed drastic cuts to the federal government, coupled with Trump’s sweeping deportations, will likely cause global markets to “tumble.”

Last week, Musk said during a virtual town hall that Americans will experience a “temporary hardship” for “long-term prosperity.”

“We have to reduce spending to live within our means,” said Musk, who has pitched himself as the director of a new “Office of Government Efficiency” under a second Trump administration.

He claimed on Friday that he would “balance the budget immediately,” adding that “a lot of people who are taking advantage of government are going to be upset about that” and that he will “probably need a lot of security, but it’s got to be done.”

“And if it’s not done, we’ll just go bankrupt,” he said.

His political action committee has similarly stated that “America is in the fast lane to bankruptcy.” There is no evidence that the United States will become “bankrupt.”

On Tuesday, Musk agreed with a social media post on his X platform that Trump’s proposals will have a “severe” economic impact.

“If Trump succeeds in forcing through mass deportations, combined with Elon hacking away at the government, firing people and reducing the deficit — there will be an initial severe overreaction in the economy,” @FischerKing64 wrote on X. “This economy propped up with debt (generating asset bubbles) and artificially suppressed wages (as a result of illegal immigration). Markets will tumble. But when the storm passes and everyone realizes we are on sounder footing, there will be a rapid recovery to a healthier, sustainable economy.”

“Sounds about right,” Musk replied.

Donald Trump’s ally Elon Musk said he would cut the US budget by one-third during his remarks at Madison Squae Garden on Octobr 27 (REUTERS)

Trump and Musk have proposed an Office of Government Efficiency that would perform “a complete financial and performance audit of the entire federal government” with “recommendations for drastic reforms,” the former president said last month.

Before introducing Melania Trump at the former president’s rally in Madison Square Garden on Sunday, Musk said he could eliminate “at least $2 trillion” from the federal budget — roughly one-third of existing spending.

“Your money is being wasted,” he said. “We’re going to get the government off your back and out of your pocket book.”

Musk is one of the most prolific spenders when it comes to elections, funneling at least $132 million into campaigns to get Trump and Republicans elected this year, according to federal campaign finance documents.

The Tesla CEO and X owner was sued by Philadelphia’s district attorney for a potentially illegal scheme to randomly award $1 million every day to voters in swing states who signed his PAC’s petition. The Department of Justice issued a warning to his PAC last week.

He’s not alone among Trump’s wealthy and influential allies promoting the idea of economic collapse as a necessary byproduct of Trump policy.

Last week, Cantor Fitzgerald CEO Howard Lutnick, a co-chair of Trump’s 2025 transition team, agreed that Trump’s proposed tariffs on imports would raise the price on consumer goods, despite Republicans arguing that President Joe Biden’s administration and Vice President Kamala Harris have failed to lower everyday costs for Americans.

“Correct: If I raise the tariff on just this particular idiosyncratic product, yes, right, it will be more expensive,” he said on CNBC’s Squawk Box.

Musk wants to run an ‘Office of Government Efficiency’ under Trump’s potential administration (AFP via Getty Images)

Trump’s running mate JD Vance also suggested that those higher costs would be offset by higher wages, of which there is no guarantee.

“Anything that you lose on the tariff from the perspective of the consumer, you gain in higher wages, so you’re ultimately much better off,” he told NBC’s Meet the Press this summer.

Trump has proposed a 20 percent tariff on all imported goods, including 60 percent tariffs on goods imported from China, a 100 percent tariff on goods from countries that have shifted away from trading with the dollar, and a 2,000 percent tariff on vehicles built in Mexico.

He has also floated an improbable idea to potentially eliminate all federal taxes and rely solely on tariffs to support the nation’s multi-trillion dollar annual budget.

A group of Nobel Prize-winning economists have warned that Trump’s economic plan will “lead to higher prices, larger deficits, and greater inequality.”