Inflation in the United States increased by 8.3% in April, compared to a year earlier. That’s down slightly from March’s 8.5%, but still close to its 40-year high.
“So it’s like the government can’t…write checks way above income without there being inflation, you know, the velocity of money stays constant,” the Tesla CEO said. “If the federal government writes checks, they never bounce. So that’s effectively creating more dollars. And if there are more dollars created, then the increase in goods and services throughout the economy, then you have inflation, again, the velocity of money remains constant, “added the billionaire.
If governments could just “issue massive amounts of money and deficits didn’t matter, then, well, why don’t we make the deficit 100 times bigger?” Musk asked. “The answer is that you can’t, because it will basically make the dollar worthless.”
“Various countries have tried this experiment multiple times,” Musk said. “Have you seen Venezuela? Because the poor, poor people of Venezuela are, you know, they’ve been trampled on by their government.”
During the conference, Musk also said that the Biden administration “doesn’t seem to be getting much done” and questioned who is really in charge. “The real president is the one who controls the teleprompter”, said. “The path to power is the path to the teleprompter.”
“The Trump administration, Trump aside, there were a lot of people in the administration who were effective at getting things done,” he remarked.
Musk’s comment on the White House comes shortly after Jeff Bezos, also one of the world’s richest people, began questioning economic policies. Bezos, in a series of Twitter posts, said the rapid increase in federal spending is the reason inflation is so high.
“Remember that the Administration did everything possible to add another 3.5 trillion dollars to federal spending”Bezos wrote on Monday, drawing rebuke from several White House officials. “They failed, but if they had succeeded, inflation would be even higher than it is today, and inflation today is at a 40-year high.”
Source: Ambito
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