Elon Musk believes there is only one apparent reason for the massive inflation in the United States: the enormous budget deficit of the US government. “Inflation is caused by the federal government spending more than it takes in,” Musk says.
Musk is for efficiency
What’s the solution to the problem? In Musk’s words, it’s simple: “To solve inflation, we need to reduce government waste. Your tax dollars need to be spent well, not badly.”
These are logical words, of course, but what is Musk actually saying? He seems to be mainly indicating that he disagrees with the way the American government is currently spending its money.
Within the government, people will also be convinced that it is better to spend tax money well, rather than badly. In that respect, Musk is kicking in a bit of an open door here.
At the same time, Musk indicates that he also wants to help solve this problem by taking a seat on a kind of efficiency commission within the American government.
An American Commission on Efficiency?
Elon Musk indicates in conversation with Lex Fridman, see above tweet, that he has discussed this problem with Donald Trump. “I have discussed with Trump the idea of a government efficiency commission and I would like to be part of that,” Musk said.
Coinbase CEO Brian Armstrong agrees with Musk, saying inflation wouldn’t exist if the U.S. government stopped printing dollars.
Ultimately, that is still the question, because inflation does not only exist because of governments. Commercial banks also play a major role in issuing credit.
In principle, credit creation is money creation in the current financial system. If you buy things with a credit card, you do not get that money from the company behind the card, but that company “creates” that money, so to speak.
In that respect, it is too simplistic to say that inflation would disappear if Musk solves this problem. More would have to happen for that. Incidentally, it is questionable how good it would be for Bitcoin if there were no more inflation.
In principle, of course, the excessive inflation in government money makes Bitcoin’s absolute scarcity of 21 million units so attractive.
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Source: https://newsbit.nl/elon-musk-onthult-onderliggende-reden-voor-inflatie/
