Elon Musk: Inflation is caused by excessive government spending

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By TP

X, Tesla and SpaceX CEO, billionaire Elon Musk, recently spoke out to clarify some fundamental aspects about inflation. Musk defends the Austrian theory, arguing that this economic phenomenon originates from excessive government spending. In a post on X, Musk contradicted comments by Kamala Harris, US vice president and Democratic presidential candidate, for whom inflation It is caused by price speculation by large corporations.

According to Musk, rising prices for products and services are a consequence of governments increasing the amount of money in the hands of the public, without guaranteeing increased production. In other words, the issuance of money without support for economic growth.

“That’s the vast majority of the problem,” he said, noting that inflation is exacerbated “by over-regulation, which prevents the market from solving an unmet need.” Referring directly to Harris’ comments, Musk explained that occasionally companies begin to engage in “monopolistic behavior,” which effectively involves speculation on the price of products and services.

However, “this is relatively rare and is usually only possible if these companies have obtained control from their sector regulator.” “Again, this is a government problem, not a private sector problem,” Musk added.

This week, during a campaign event ahead of the December presidential election, Kamala Harris promised that if she won, she would dedicate herself from day one to reduce the prices of products and servicesthat is, inflation. Now, Harris emphasized that she will confront “the big corporations” of the United States, which «are dedicated to speculating on prices»according to the current vice president. “I will stand up to corporate landlords who unfairly raise rents. I will take on Big Pharma and cap drug costs,” Harris said at the rally.

Musk joins those who blame governments

With his comments, Elon Musk took his place among those who consider inflation to be a phenomenon caused by governments. Among them is former president and current candidate Donald Trump, who acknowledges that rising prices are generally a consequence of from government intervention in monetary policy.

A few weeks ago, Trump participated in the Bitcoin 2024 event, one of the largest conferences of the most important digital currency in the world. There, he emphasized that The issuance of trillions of dollars has resulted in an “inflationary disaster.”

According to Trump, the inflationary rise “comes from printing hundreds of billions of dollars” to, among other things, “finance endless wars abroad.” “Uncontrolled inflation is a hidden tax. It is a disaster. It is a human tragedy that has destroyed people. It is a national disgrace. It is destroying everything in its path. It must never be allowed to happen again, and it will not happen when I am president,” Trump said in front of more than 20,000 bitcoiners. According to Trump, bitcoin (BTC) enthusiasts are the ones who understand inflation the most. And rightly so. The monetary policy of this digital currency It is totally opposite to that which controls the fiat system. as it is known. This is because the monetary emission of bitcoin is decentralized and, therefore, cannot be controlled or manipulated. In total, there are 21 million BTC to be distributed. Of those, more than 19 million have already been issued and the remainder is estimated to enter circulation within a century. In contrast, fiat money, like the US dollar, is inflationary because its monetary policy is at the mercy of rulers. In this case, the Federal Reserve. It is this entity that decides when to issue or not more greenbacks, directly impacting the value of that currencycausing depreciation and inflation if there is no economic growth behind that decision.