‘Bankruptcies Need to Happen’: Elon Musk welcomes an economic recession in US

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Elon Musk may be aiming to add “economist” to his long list of accomplishments, as he revealed his thoughts on the possibility of a recession on Twitter – and why that recession would, in the end, be beneficial to the economy. It all began when Musk posted a poll on Twitter asking, “Who do you trust less?” “Question of the Day.” “Politician” or “billionaire” were the options.

On the afternoon of May 27, with about 7 hours left in the vote, politicians were winning (or losing, if you want) by a landslide of 76 percent to 24 percent. The thread began with a discussion of economics, followed by a discussion about unrealized capital gains taxation, and lastly, a question from user @BLKMDL3 (Zack), “Do you still believe we’re nearing a recession?” “Yes, but this is really a positive thing,” Musk said, in his usual forthright manner.

For far too long, it has been showering money on idiots. Some bankruptcies are necessary.” “Companies that have essentially negative cash flow (i.e. value destroyers) must perish in order to cease consuming resources,” he said. “All the Covid stay-at-home crap has misled people into believing that you don’t really need to work hard,” Musk tweeted, referring to the work-from-home culture created by the COVID-19 epidemic. “A rude awakening is on the way.”

Musk made a similar remark regarding recessions at the All-In Summit in Miami Beach in mid-May, according to Newsweek. “What tends to happen when you have a boom that lasts too long is that money is misallocated.” He mentioned he’d gone through a couple of recessions at the time. He recently stated that a recession will last 12 to 18 months based on his previous experience.

Despite the fact that the United States’ GDP fell in the first quarter, according to the Bureau of Economic Analysis, analysts are split on whether the country will enter — or is already in — a recession. According to a study of analysts conducted by Bloomberg in May, the chances of the United States entering a recession are just 30%, up from 27.5 percent in April. The Fed, on the other hand, risks causing a recession if it increases interest rates too high or too quickly, according to asset management giant BlackRock.

Source: GoBankingRates

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