--- title: "Economist Warns That Elon Musk Is About to Cause a “Deep, Deep Recession”" description: "A professor economist is warning that unelected billionaire Elon Musk is likely sending the United States headlong into a huge recession. " date: "2025-02-20" modified: "2025-02-20" authors: - name: "Noor Al-Sibai" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/nooralsibai" url: "https://futurism.com/economist-elon-musk-recession" categories: - "Elon Musk" - "Future Society" - "The Industrialists" tags: - "doge" - "donald trump" - "economics" - "elon musk" --- # Economist Warns That Elon Musk Is About to Cause a “Deep, Deep Recession” ![A professor economist is warning that unelected billionaire Elon Musk is likely sending the United States headlong into a huge recession. ]() *\Image: Kevin Lamarque / Pool via Getty / Futurism\* A professor and former Department of Labor economist is warning that unelected White House advisor and multi-hyphenate billionaire Elon Musk is sending the United States headlong into a huge recession. In a [post on Bluesky](), Jesse Rothstein, a University of California, Berkeley public policy professor who was the DOL's chief economist at the start of the Obama administration, addressed the dire situation we could soon be facing. "It seems almost unavoidable at this point," Rothstein wrote, "that we are headed for a deep, deep recession." Between the [hundreds of thousands of government jobs]() on the chopping block and the cancellations of countless federal contracts, the economist noted that upcoming employment reports are looking quite scary indeed. "The March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-9 and 2020," the professor wrote in his [multi-post]() thread. "Add on to that enormous private market uncertainty — how could you hire in these conditions? — and this is going to be very, very bad." The basic idea is that higher unemployment leads to drops in consumer spending, which can slow economic activity and growth, which in turn leads to fewer hires, closing the recession circle. But there remains some uncertainty when it comes to what Musk's newfound role as federal spending slasher might mean for the economy. That's in large part due to the chaos Musk's so-called Department of Government Efficiency has wrought. As Rothstein [points out](), "I worry that \[the US Office of Personnel Management\] itself doesn’t yet know how many workers were fired. It may be some time before it can report accurately to the \[Bureau of Labor Statistics\]." But the ripple effects of major hiring freezes could be "very large," he [argued](). "Universities and others are already instituting hiring freezes." Where the major job losses will leave the fate of the US economy in the short term remains to be seen. But chances are, it won't be pretty, even according to Musk himself. The billionaire said during a campaign stop for Trump [just ahead of the election]() that America would likely be in for some financial "hardship" the exact should he begin [trimming the fat](), as he saw it. "We have to reduce spending to live within our means," Musk said, seemingly using the royal we to refer to the hoi polloi despite being a billionaire himself. "And, you know, that necessarily involves some temporary hardship, but it will ensure long-term prosperity." It's entirely possible the [billionaire's prediction]() may eventually come true — and as Rothstein suggests, the consequences of his fat-trimming may be as bad, or worse, than the immediate cuts. "To be clear: Even greater damage will be done by the loss of federal government productivity," [Rothstein wrote](). "The workers who are losing their jobs were worth more than they were being paid! We are all poorer when roads, planes, and food are unsafe, when parks are closed, etc." **More on Musk:** [*Top Trump Ally Says Elon Musk Is a "Parasitic Illegal Immigrant"*]() ## Author At Futurism, I've often been drawn to unpacking the narratives that underlie technological, scientific and medical progress, with a special interest in areas of conflict and ambiguity that end up setting agendas and steering the fates of both elites and the hoi polloi. I'm a committed generalist, but I often find myself returning to work involving NASA and the private space sector, the effects of AI on media and society, and the mechanics of the pharmaceutical industry, with a specific focus on the spread of GLP-1 drugs like Ozempic and Wegovy. Prior to Futurism, I worked for publications ranging from Media Matters and Truthdig to Raw Story and Bustle. I'm also the author of "Myspace Scene Queens," a 2024 title in Instar Books' acclaimed "Remember the Internet" series. My work at Futurism has been cited by outlets including the New Yorker, Slate, Nieman Lab, the Verge, the MIT Technology Review, the Sunday Times, and the Daily Beast. I grew up in North Carolina, attended the University of North Carolina at Asheville, and now live in Brooklyn, New York. In my free time, I'm an avid reader and music fan; you can probably find me at a local poetry reading, concert, underground rave, or DJ set. I'm the proud parent of an ineffable orange cat named Mee-Mow. ### Author social links [Bluesky]()