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Elon Musk Discourages A Stimulus Package On Twitter

Stimulus Trap
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EDITOR NOTE: Elon Musk is indeed a “strange bird,” and that’s what makes him so interesting and his companies’ shares so vulnerable to “personality risk.” It’s true that fiscal stimulus has become politicized, but it doesn’t follow that government’s job is to maximize the happiness of its citizens. Economic struggles take place amid a competitive arena. It’s called capitalism. Musk seems to turn a blind eye to this, having received “billions in corporate welfare” from us, the taxpayers.

The U.S. House and Senate are sparring over what a second coronavirus stimulus package will include, but before the Republicans’ stimulus proposal was released on Monday, tech billionaire Elon Musk dropped his opinion on the topic via Twitter.

“Another government stimulus package is not in the best interests of the people, [in my opinion],” Musk tweeted on Friday. That’s because congressional stimulus packages “are jammed to gills with special interests...,” Musk tweeted.

Indeed, as The New York Times pointed out in March, the first $2 trillion coronavirus stimulus package included special provisions for specific companies and interest groups.

As it pertains to payments to consumers, according to Musk, “If we do a stimulus at all, it should just be direct payments to consumers.”

A Twitter user suggested some back of the napkin math that a $2 trillion stimulus proposal divided by 330 million people living in the United States would leave each person with about $6,000. To this, Musk agreed: “Yeah, would have been way better just to send everyone $6,[000],” he tweeted.

(Both the $1 trillion Senate Health, Economic Assistance, Liability Protection and Schools, or HEALS, Act announced on Monday and the House’s $3 trillion Health and Economic Recovery Omnibus Emergency Solutions, or HEROES Act, announced in May do include cash payment provisions, but also other things like funding for states and the Paycheck Protection Program to support small businesses.)

Musk has long been a vocal proponent of universal basic income. As far back as 2016, Musk has said the government will eventually have to give people some sort of cash payment because robots will replace human workers.

“As a reminder, I’m in *favor* of universal basic income,” Musk tweeted on Friday, following his comments on a stimulus package. 

The “goal of government should be to maximize the happiness of the people. Giving each person money allows them to decide what meets their needs, rather than the blunt tool of legislation, which creates self-serving special interests,” Musk tweeted. 

Musk’s opinion on the stimulus is particularly notable given that Tesla benefited from the government’s original coronavirus stimulus program.

“As part of various governmental responses to the pandemic granted to companies globally, we received certain payroll related benefits which helped to reduce the impact of the COVID-19 pandemic on our financial results,” Tesla’s second quarter financial filing released Tuesday says. The payroll related benefit helped Tesla offset charges the car maker incurred as a result of idle capacity during the period, Tesla said in the filing. 

It’s not the first time Tesla has received government assistance. Tesla sold governmental regulatory credits to help it achieve its fourth quarter of profitability, CNBC reported. (In some states, auto makers must sell a certain number of electric, hybrid electric or other zero emission vehicles. If the auto maker doesn’t sell any such vehicles, then it must buy credits to be in compliance. Because Tesla only sells electric vehicles, it can sell its credits to other automakers.)

Tesla also benefited directly from governmental funding in the wake of the 2008 recession. “We can’t move forward with that without a major amount of capital,” Musk said in an interview in 2008, according to Bloomberg

Vermont Senator Bernie Sanders called Musk a “hypocrite” on Friday for his comments. 

Neither Tesla nor SpaceX immediately returned CNBC Make It’s request for further comment on behalf of Musk.

Originally posted on CNBC

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