Elon Musk recently resorted to Twitter to express yet another controversial viewpoint, this time explaining that a recession would be “good” for the American economy.
“Some bankruptcies need to happen,” Tesla CEO Elon Musk wrote on Twitter in response to users.
Thursday night, in response to a Twitter user’s concern about whether the United States was headed for another recession, Tesla CEO Elon Musk responded bluntly, “Yes.” Moreover, he explained why this economic crisis, which most Americans would see as a bad thing, was, in his opinion, a net positive.
“Yes, but this is actually a good thing,” the SpaceX CEO responded. “It has been raining money on fools for too long. Some bankruptcies need to happen. Also, all the Covid stay-at-home stuff has tricked people into thinking that you don’t actually need to work hard. Rude awakening inbound!”
“How long do you believe this recession will persist, Elon? You called it!! Just curious, could this one last year(s)??” another user asked the industrialist.
“Based on past experience, about 12 to 18 months. Companies that are inherently negative cash flow (i.e. value destroyers) need to die so that they stop consuming resources,” said Mr Musk.
The SpaceX founder’s late-night remarks arrived just weeks after he’d made a speculative prediction that the US was “probably” headed for another recession, which by his estimates, would last a year to a year and a half.
“These things pass, and then there will be boom times again,” Musk said during a guest appearance at the All-In Summit in Miami Beach earlier this month.
His remarks then, much like this week’s tweets, seemed to highlight the tech billionaire’s disapproval of the current administration’s economic management.
“This administration, just, it doesn’t seem to get a lot done,” he noted during this month’s speaking engagement.
Analysts have indicated in the New York Post that the US economy is more likely to enter a recession due to persistently high inflation rates and supply chain disruptions caused by COVID.
Fears of a looming recession have grown in recent months as the Federal Reserve tightened monetary policy, raising its benchmark interest rate by half a percentage point, the biggest increase in two decades, to curb its 40-year-high inflation.
The prospects of a decline this year, according to reports, are still low (at 30 per cent).
