Mortgage debt makes more than $12 trillion of all debt out there. It’s just massive. And, despite that, America remains absurdly productive. GDP is growing, innovation is relentless, and new products hit the market daily. I bring this up because Elon Musk could not be more wrong about the Big Beautiful Bill, the current budget deficit, and trying to hack everything into austerity.

The simple fact is that money printing reduces the real burden of existing debt. Inflation chips away at the value of yesterday’s obligations. Those hoarding cash or holding low-interest loans see their position deteriorate. But everyday borrowers? Their fixed payments become easier to manage. So with that being said, the following must accepted:

• Inflation helps everyday homeowners (large portion of middle class people)
• Inflation hurts hoarders of cash, and especially banks

If energy production is scaled properly, especially domestic sources, then the inflationary impact on essentials like food can be stabilized. In this scenario, the average American’s real debt shrinks, while home values and other hard assets rise.

Now, why did I write all of that? I wrote all of that because Elon Musk has been talking endlessly about the debt situation. However, with the above in mind, he could not be more wrong. Also, he is getting more than that wrong.

One common misunderstanding, often repeated by Elon Musk, is the conflation of the national debt with the interest on the debt. These are two different variables:

• The national debt is now over $34 trillion.
• Interest payments are a function of how the Federal Reserve sets rates, not the total debt itself.

When interest rates rise, the cost of servicing the debt rises. But this isn’t the same thing as being overwhelmed by the size of the debt. The Fed has the power to adjust this cost and in many cases, already owns large swaths of the debt in question.

Here’s the most misunderstood aspect of U.S. sovereign finance: much of the interest paid on Treasury bonds never leaves the system.

• A huge portion of U.S. debt is held by American institutions, individuals, and yes—the Federal Reserve.
• The Fed, by law, remits any profits (including interest income) back to the U.S. Treasury.
• Private holders of debt pay taxes on interest earned.

So in many ways, interest on the debt isn’t a transfer to outsiders. It’s money moving in a loop—from government to citizen and back again. We are, effectively, our own bank.

This loop, combined with the unique advantage of issuing debt in a currency we control, gives the U.S. infinite maturity, an almost unmatched privilege in global finance.

For individuals, the math is clear:

• Fixed-rate debt becomes easier to pay as inflation rises.
• Homeowners benefit from hard asset appreciation.
• Savers in cash or low-yield assets lose purchasing power.

This is why moderate, controlled inflation—paired with productive investment and energy abundance—can be one of the most powerful tools for reducing debt inequality.

The one tricky piece is equities. Inflation can lift stock prices, but rising input costs and wages tend to compress profit margins. That’s where tariffs and industrial policy come in:

• Tariffs can apply pressure to imported competition.
• Domestic producers may benefit from policy protection, but still face tighter margins.

So while stock prices may rise, valuations are unlikely to go into mania-mode, since profitability gets squeezed.

Stef’s Final Thoughts:

Debt isn’t the enemy. Stagnation is.

With the right mix of energy abundance, productive growth, and smart monetary flexibility, debt becomes a tool, not a trap. This is especially true in moments of great growth and innovation.