Recently, Musk made another bold prediction - that within three years, AI and Bots will cause the US economy to fall into severe deflation. Sounds pretty scary? But he thinks this is actually a good thing that could alleviate America's debt crisis.

His logic is as follows: when the growth rate of the output of products and services exceeds the growth rate of money supply, deflation comes. AI and Bots are rapidly expanding productivity, and in three years or even faster, the deflationary pressure will push interest rates down to zero. Debt burden? Naturally, it will lighten.

Musk explains it very plainly—whether it's inflation or deflation, it fundamentally comes down to whether output or money supply is growing faster. If output outpaces the printing press, prices fall; if the printing press outpaces output, prices rise. It's that simple and brutal. Therefore, he asserts that the productivity explosion in the AI era will directly drive interest rates to zero, and the debt problem will be easily resolved.

But I'm not buying it.

Let's start with the first question: America's manufacturing industry has long been hollowed out. Now, the proportion of manufacturing in the economy is pitifully low. No matter how advanced the technology is, the improvement in production efficiency has a limited impact on overall output. AI and Bots are impressive, but without factories and industrial foundations, how can they be converted into actual output?

The second question is more critical. The root of the US debt crisis lies not in the supply side, but in the demand side—demand has been insufficient for a long time, and the government can only rely on borrowing to expand spending to maintain demand. If AI and Bots really bring about a supply explosion, what will be the result? Deflation will intensify, and demand will shrink even further. At this point, the government will have to borrow more money to support the economy. The scale of debt will keep increasing, and the crisis will only be delayed, not disappear.

So Musk's logic seems coherent, but it overlooks the structural ailments of the American economy. Technological progress can improve efficiency, but it cannot solve the collapse in demand and the hollowing out of industries. The debt crisis cannot be resolved simply by lowering interest rates to zero— as long as the scale of borrowing continues to expand, the thunder will eventually strike.