University of California professor points to Elon Musk’s reckless attacks on the government as the root of “imminent” decline.

A former Department of Labor economist warns that billionaire Elon Musk, a White House advisor with free hand on government decimation, is steering the United States toward a severe and “imminent” economic recession.

Jesse Rothstein, a public policy professor at the University of California, Berkeley, and chief economist at the Department of Labor under the Barack Obama administration, sounded the alarm about the impending downturn in a post on Bluesky.

"It seems almost unavoidable at this point that we are headed for a deep, deep recession." Rothstein wrote.

Rothstein pointed to massive government job cuts and the cancellation of federal contracts as key warning signs. He predicts that upcoming employment reports would paint a grim picture.

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"The March employment report (to be released April 4) seems certain to show bigger job losses than any month ever outside of a few in 2008-09 and 2020.

Add on to that the enormous private market uncertainty—how could you hire in these conditions?—and this is going to be very, very bad," the economist explains.

Higher unemployment leads to reduced consumer spending, slowing economic activity and growth, which in turn discourages hiring—creating a cycle that deepens a recession.

The full impact of Musk’s role in slashing federal spending remains uncertain, but his so-called Department of Government Efficiency – which is fact has never been approved by Congress – has already caused significant disruption.

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Rothstein noted that even the U.S. Office of Personnel Management may not yet know how many workers have been laid off, which could delay accurate reporting to the Bureau of Labor Statistics.

The ripple effects of major hiring freezes could be very large but the long-term consequences remain unclear, Rothstein added. He cast doubt about Musk’s promises that the hardship will be short and local while in the long run prosperity will be ensured.

Instead, the economist guarantees that it is a straight path to poverty:

"To be clear: Even greater damage will be done by the loss of federal government productivity. The workers who are losing their jobs were worth more than they were being paid! We are all poorer when roads, planes, and food are unsafe, when parks are closed, etc."

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