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Elon Musk Predicts Inevitable US Debt Default: When, Not If

As the US debt crisis continues to dominate discussions in Washington, Wall Street, and the business community, Tesla CEO Elon Musk has weighed in with a prediction that the US will inevitably default on its debt. The question for him is not whether this default will occur, but when.

The ongoing political stalemate between the White House and Republican House Speaker Kevin McCarthy only adds to the uncertainty, as both parties blame each other for the current situation and the lack of flexibility. Recently, Goldman Sachs analysts suggested that the projected date for default could be as early as June, rather than the previously expected August.

McCarthy outlined the Republican plan to avoid a US default on the New York Stock Exchange on Monday, Apr. 17. He proposed raising the debt ceiling by $1.5 trillion, aiming for a one-year reprieve. However, the GOP will only support this if the bill includes budget cuts and measures such as requiring work to receive solidarity allowances.

Federal Reserve Chair Jerome Powell has emphasized that raising the debt ceiling is the only timely solution that allows the US to pay its bills. McCarthy’s plan, however, has been met with criticism from the White House and Democrats, who have called for a more detailed and comprehensive approach.

In response to the ongoing debate, Musk commented on a White House tweet, stating that default is a matter of when not if. The billionaire entrepreneur, who has become an icon for conservatives, seems to believe that Democrats and Republicans are unlikely to reach a last-minute agreement.

A US default would have significant implications for investors and the global markets, adding to the already challenging economic landscape marked by high inflation and cautious consumer spending. While raising the debt ceiling is technically a straightforward measure, it requires the agreement of Congress – something that has happened 78 times since 1960, according to the US Treasury Department. However, the current political climate may make finding a solution more difficult than ever before.