Elon Musk reveals the only way to reduce ‘insanely high’ US debt on Nikhil Kamath's WTF Podcast

In a landmark episode of Zerodha co-founder Nikhil Kamath's WTF Podcast, released on Sunday, 30 November, Tesla CEO Elon Musk offered a solution for how the United States might address its debt crisis.

During the nearly two-hour-long podcast, Nikhil Kamath asked Elon Musk about the rising US debt and possible ways forward to solve it. The Tesla CEO became the latest guest of Kamath's WTF Podcast, which broke the internet after weeks of anticipation.

“Is that the way forward for US by the virtue of how much debt they have today? Do they deflate away from the currency and transition into this new form and lead that push, because it would make more sense to them?” Nikhil Kamath asked.

Musk explained what he believes could solve the US debt crisis: AI and robotics.

“So long as civilisation keeps advancing, we will have AI and robotics at very large scale. That's the only thing that's gonna solve for the US debt crisis,” Elon Musk said.

Calling the current US debt “insanely high”, the Tesla CEO noted that interest payments are only going to increase under the current scenario.

“You know that because currently the US debt is insanely high, and the interest payments on the debt exceed the entire military budget of the United States, just the interest payments, and that's, at least in the short term, going to continue to increase,” Musk said on Nikhil Kamath's WTF Podcast.

“So I think, actually, the only thing that can solve for the debt situation is AI and robotics,” he added.

How will AI help reduce US debt?

Elon Musk said AI and robotics are likely to result in deflation, which in turn will lead to a reduction of US debt.

“I guess it probably would cause significant deflation, because deflation or inflation is it's really the ratio of goods and services produced to the change in the money supply. So, like if goods and services output increases faster than money supply, you will have deflation, because the services decrease,” Musk told Nikhil Kamath.

In less than three years of time, according to Elon Musk, goods and services growth will exceed money supply growth.

“If real business services output increases slower than the money supply, you have inflation. It's that simple. So if you have AI and robotics have a dramatic increase in output of goods and services, probably you will have deflation,” the Tesla CEO said.