Elon Musk Alleges Government “Magic Money Machines” Operating Without Oversight
Billionaire entrepreneur Elon Musk has sparked controversy by claiming that 14 “magic money computers” within the U.S. government are issuing payments with virtually no oversight or accountability. The Tesla and SpaceX CEO made these allegations during a recent podcast appearance with Senator Ted Cruz, characterizing government financial operations as a system rife with waste and fraud.
“Any computer which can just make money out of thin air, that’s magic money,” Musk stated during the conversation, as reported by The Economic Times. The billionaire claimed these computers, primarily located at the Treasury Department, send out funds without proper tracking or explanation.
Claims of Financial Mismanagement
Musk’s comments emerged during a broader discussion about the Department of Government Efficiency (DOGE), which he leads alongside Vivek Ramaswamy. The agency has claimed to identify $115 billion in potential government savings, though these figures have faced scrutiny from financial analysts.
During the podcast, Musk offered a scathing assessment of government bookkeeping practices. “In my opinion, it’s like 80% waste and 20% fraud,” he said, suggesting payments continue flowing to contracts even after they’re supposed to be terminated. He further alleged that non-profit organizations receive government funds with minimal accountability, calling it “maybe the biggest scam of all time.”
“If it was a public company, it would be delisted immediately,” Musk added. “It would fail its audit, and the officers of the company would be imprisoned,” Fortune reported.
Expert Interpretations Vary
Financial experts have offered differing interpretations of Musk’s claims. Jay Hatfield, CEO of Infrastructure Capital Advisors, suggested Musk might be criticizing the government’s failure to properly implement double-entry accounting, where financial transactions must have equal and opposite effects in at least two different accounts.
David Andolfatto, a former senior VP at the Federal Reserve Bank of St. Louis who now chairs the University of Miami’s economics department, offered a different perspective. “What Musk was probably trying to communicate was that the resources devoted to these agencies, they’re not being properly audited, or there’s not proper oversight,” Andolfatto said, while noting that the government’s ability to create money “is neither here nor there.”
Andolfatto pointed out that banks and corporations also create money through lending and issuing shares, activities not dissimilar to government practices Musk criticizes. “Banks effectively do the same when they lend out deposits,” he said, “or when a corporation like Musk’s Tesla issues more shares, diluting the value of existing holdings.”
How has the MSM remained silent about Elon finding 14 "magic money" computers that the U.S. government uses to print 'money out of thin air.'
— Mr. Intuitive 🏴☠️ (@BlackberryXRP) March 20, 2025
Do we really owe as much debt that is stated if some debt was printed fraudulently?
pic.twitter.com/iAcnoXozEp
Understanding Government Money Creation
While Musk’s characterization suggests impropriety, the U.S. government does legitimately create money through established processes. Former Federal Reserve Chair Ben Bernanke acknowledged this capability in a 2002 speech, stating that the government has a “technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.”
In practice, the Treasury Department oversees the printing of physical currency, while the Federal Reserve creates money digitally by purchasing assets from commercial banks. This increases liquidity in the financial system, allowing banks to create credit by lending some of that cash. However, these processes operate within regulatory frameworks, not through secret “magic computers” as Musk’s comments might suggest.
Libertarian Concerns
Musk’s criticism echoes long-standing libertarian concerns about government money creation. Senator Cruz and former Senator Ron Paul have previously argued that government currency issuance effectively taxes citizens through inflation. In his 2009 book “End the Fed,” Paul noted that a collection of goods and services worth $1 in 1913 cost $21 at the time of publication, representing a significant devaluation.
“This 1913 money stock constitutes a tiny fraction of our total wealth,” Andolfatto wrote in response to such concerns. “The loss in its purchasing power has been spread over countless individuals, agencies, and generations.”
Neither Senator Cruz’s office nor the Treasury Department has responded to requests for comment on Musk’s allegations. As the world’s richest man continues his role with DOGE, his statements about government financial practices are likely to remain the subject of intense debate among economists, government officials, and the public.
The controversy highlights broader questions about government spending, monetary policy, and financial accountability at a time when national debt and inflation concerns remain prominent in public discourse.
