In the home stretch of the 2024 election, voters who have considered both campaigns’ proposals to address the cost of living are now hearing a new narrative from the Republican side: accept some short-term economic pain to rein in government spending.
That message comes from former President Donald Trump’s wealthiest supporter, Elon Musk, who says the GOP candidate’s plans to put the U.S. on a firmer financial footing would likely come with “temporary hardships” for ordinary Americans.
During a virtual town hall event on Oct. 25 on Musk’s social media platform X, the multibillionaire Tesla and SpaceX executive said he was “praying for a win” for Trump so he could begin working in a high-level Cabinet role to slash federal spending.
“We have to cut spending to live within our means,” Musk said. “And you know, that’s necessarily going to come with some temporary hardships, but it’s going to create long-term prosperity,” he said.
Many economists agree that Trump’s economic and fiscal proposals could unleash an economic disaster, though it’s unclear whether they’ve considered or believed Musk’s calls for austerity.
In a joint letter published last week, 23 Nobel Prize-winning economists warned that Trump’s plans for tariffs, tax cuts, and an immigration crackdown — including the detention and deportation of millions of people — would “lead to higher prices, bigger shortages, and greater inequality.” More than anything else, they wrote, Trump would undermine the rule of law and political certainty, “the most important determinants of economic success.”
The call for voters to endure some hardship comes as the U.S. economy heads into Election Day on solid footing, with consumer confidence soaring, employers still creating hundreds of thousands of jobs, wages far outpacing inflation, and overall economic output plodding along. But many Americans are still struggling with major expenses like child care and elder care costs, a dire housing market, high insurance and debt payments, and more.
Although elected officials from both parties have campaigned for decades to address America’s debt burden — now at 120% of GDP, a record high — and spending commitments, neither party has done much. Trump has been no exception. During his first term, the debt grew at a pace comparable to that of his predecessors.
One reason for that lack of progress is the struggle to convince longtime recipients of government spending, from Social Security and Medicare beneficiaries to defense contractors, to accept change.
This time around, Trump has promised to appoint Musk as Chief Government Efficiency Officer.
That gives Musk’s candor about spending cuts — and his track record of making big, painful cuts at his own companies — added weight.
“There’s so much government waste that it’s a little bit like sitting in a room full of targets, like you can’t miss — you shoot in any direction you want to hit a target,” Musk said. He added: “As a country, we obviously have to live within our means,” and said he envisioned spending all government spending “one item at a time, no exceptions, no special cases.”
He said he expected an “antibody reaction” from “many sides.”
“Everybody’s going to have to get a haircut… we can’t be spendthrifts… we have to live honestly,” Musk said.
Musk said at Trump’s rally at Madison Square Garden on Sunday that he wants to cut $2 trillion from the federal budget, but he didn’t specify where.
And on Tuesday, Musk reiterated the expected economic pain of the plan. In response to an X user who wrote that the cuts would lead to “a severe overreaction in the economy” and that “markets will crash” before the U.S. gets on “a healthier footing,” Musk replied, “Sounds about right.”
Musk’s representatives did not immediately respond to requests for comment. The Trump campaign did not immediately comment, but has previously said the GOP agenda would not cause economic problems in the short term. “The only pain Americans would face would be four more years of Kamala’s failed economic policies,” a spokesman told CNBC this week.
Musk himself would likely face a series of conflicts if he were to oversee federal spending cuts. Musk’s space company SpaceX has received billions in federal spending in recent years and is poised to receive another $7.9 billion in federal revenue over the next three years, according to FedScout’s research into federal spending and prime contracts.
That number doesn’t include block grant spending by states for things like SpaceX’s Starlink terminals and satellite internet service, which are often purchased for use after natural disasters or other emergencies, FedScout CEO Geoff Orazem said.
Based on existing and pending contracts, SpaceX is also likely to bring in another $20 billion in federal business through the 2028 timeframe (or at least another $5 billion to $6 billion per year).
There is some skepticism on Wall Street that a new Trump administration could enact cuts on the scale Musk has proposed.
Bob Elliott, chief investment officer at the Unlimited Funds investment group, said the idea of cutting $2 trillion from the budget in an immediate time frame was “totally unlikely,” noting that it would equate to nearly all discretionary funding — currently $1.7 billion — including transportation, education, housing and environmental programs.
Instead, he said, investors are scrutinizing both campaigns’ economic proposals. With Trump, he said, they fear his plans could trigger a surge in inflation.
“They both signal that they plan to maintain significant deficits and increased government spending, especially relative to the strength of the economy,” Elliott said.
Steve Sosnick, chief strategist at the Interactive Brokers financial group, said in an email that while neither candidate has preached fiscal restraint, Trump’s policies “would be very damaging to the budget deficit and the national debt.”