Elon Musk, the visionary behind Tesla and SpaceX, and head of the newly established Department of Government Efficiency, recently featured on Senator Ted Cruz's podcast to share his insights from Washington.


“It’s astounding,” Musk exclaimed when Cruz brought up the concept of “magic money computers.”


“You might believe that government systems communicate effectively, synchronize their data, and maintain a clear picture of fund allocations. But in reality, it’s quite chaotic,” Musk explained.


He referred to what he discovered as a “magic money computer”—essentially, any system capable of conjuring money from nowhere.


In a striking revelation, *@elonmusk* shared on the latest episode of Verdict that there are actually 14 of these ‘magic money computers’ within the federal government, responsible for distributing funds out of thin air.




According to Musk, these computers, primarily located at the U.S. Treasury, are key to how the system operates.


 

What Musk described aligns with the workings of the global financial framework. Indeed, the U.S. government has the capacity to create money from nothing.


Some could even describe it as magical.


Ben Bernanke has long discussed this phenomenon. In a notable 2002 speech as a Federal Reserve governor, he stated, “The U.S. government possesses a mechanism akin to a printing press (or its electronic equivalent), enabling it to generate as many U.S. dollars as it desires at virtually no cost.”


Supporters of modern monetary theory (MMT)—often labeled by detractors as magic money theory—take this a step further, suggesting that governments with their own currencies face no true spending limits. While taxes can help manage inflation or redistribute wealth, they aren’t strictly necessary for financing government operations.


Stephanie Kelton, a prominent MMT advocate and former MarketWatch podcast co-host, has claimed that the government need not resort to issuing bonds to fund its deficits.


Furthermore, private citizens can also access their own “magic money computer.”


However, there is a significant stipulation: to do so legally, one must first obtain a banking license.


With that license, they can issue loans, effectively creating money out of thin air.


In practice, though, commercial banks are constrained by factors such as capital requirements when it comes to generating this “magical money.” Banks also typically prefer not to lend to those unable to repay. Recent Federal Reserve data shows that banks generated credit—this magical currency—at an annual rate of 4.4%.


Returning to Musk's findings, he suggested that the government’s tracking of its spending is far from meticulous. For instance, many payments lack specific coding that indicates their purpose.


He attributed this lack of oversight to 80% incompetence and 20% malice.