Big Beautiful (Dollar) Bills Are Required To Keep Global Economy Alive

Elon Musk has voiced frustration over the “big beautiful bill,” likely referring to expansive U.S. government spending packages that contribute to the growing federal deficit. His concerns seem rooted in a belief that such spending is unsustainable, potentially leading to economic instability or inflation. Musk, a vocal advocate for fiscal restraint, often highlights the ballooning national debt—now over $33 trillion—and warns of long-term consequences like higher taxes or a weakened dollar. His perspective aligns with those who see deficit spending as a reckless habit, especially when funded by borrowing or money creation, which he fears could destabilize the U.S. economy and, by extension, his ventures like Tesla and SpaceX that rely on stable markets.
 
However, Musk’s critique appears to overlook the unique role of the U.S. dollar as the world’s reserve currency, a status underpinned by the Federal Reserve’s policies and the U.S.’s ability to deficit spend. The dollar’s dominance means global demand for it remains high, as countries and institutions use it for trade, debt issuance, and reserves. To meet this demand, the U.S. must effectively “export” dollars, often through deficit spending, which injects liquidity into the global economy. This process, tied to the Federal Reserve’s ability to issue dollars and the Treasury’s borrowing capacity, supports international trade and financial systems. Without this, global markets could face dollar shortages, disrupting commerce and growth—issues Musk’s global businesses would likely feel acutely.
 
There’s no simple way to halt this dynamic without upending the global economy. Ending deficit spending or significantly reducing the money supply could strengthen the dollar too much, making U.S. exports uncompetitive and triggering deflationary pressures abroad. Alternatively, if the dollar lost its reserve status, the U.S. would face higher borrowing costs and reduced economic influence, outcomes Musk would likely oppose. While his concerns about fiscal irresponsibility aren’t baseless, the reality of the dollar’s role means deficit spending is less a choice than a structural necessity. Musk’s frustration, while understandable, misses the broader mechanics of a system that, for now, demands the U.S. keep pushing dollars outward to sustain global economic stability.