Trump called inflation a disaster for consumers — and Musk blamed it on government waste

• Donald Trump and Elon Musk called out the pain caused by high levels of inflation in recent years.
• Trump bemoaned that people can't afford groceries and savers have been "decimated" by rising prices.
• Musk blamed inflation on government overspending and pushed for deregulation to bring down costs.

Donald Trump and Elon Musk lamented the brutal impact of rising prices in their X Spaces conversation on Monday.

"It's a disaster with inflation," the former US president said. "It doesn't matter what you make. The inflation has eaten you alive."

The annualized pace of price increases soared to a 40-year high of more than 9% in June 2022. It has slowed markedly since then to 3% in June, but remains well above the Federal Reserve's 2% target.

Trump specifically called out the steeper cost of food for families. As the Republican presidential nominee, he's incentivized to paint a dour picture of the economy under the Democrats, and promise he'll make things better if voters back him in November's election.

"They don't have enough money to buy groceries; the inflation has killed them," Trump said. "They used to be able to buy a whole cart, and today a lot of people just don't have the money. They go in and can't buy anything."

Savers punished

Trump bemoaned that lifetime savers have been unfairly punished by soaring prices.

"The people that saved money … they got no interest on their money, and inflation destroyed them," he said. "Those people have been absolutely decimated."

Americans were able to put away significant sums four of five years ago, Trump noted. "Today, they're using all their money and borrowing money just to live. It's a horrible thing that's happening."

This historic bout of inflation has been blamed on several factors . The pandemic disrupted worldwide production, snarled supply chains, shuttered businesses, and fueled labor shortages. Russia's invasion of Ukraine roiled the international oil trade and caused energy prices to soar. World governments spent heavily to shore up their economies, stoking heavy demand in a period of constrained supply and causing prices to climb.

Musk — the world's richest person, CEO of Tesla and SpaceX , and X's owner — agreed with Trump that inflation is a pressing problem during their conversation.

"A lot of people are concerned about the economy, a lot of people are concerned about inflation," he said. "Inflation is effectively a tax on people that saved money and for people that are working day to day."

Musk blamed fast-rising prices on public officials splashing cash.

"Inflation comes from government overspending because the checks never bounce when they're written by the government," he said. "So if the government spends far more than it brings in, that increases the money supply. And if the money supply increases faster than the rate of goods and services, that's inflation."

Deregulation call

Musk called for authorities to cut back on spending and suggested a government efficiency commission be appointed to ensure public funds are spent wisely. He underlined the ballooning federal debt and the spiraling size of the interest payments required to service it.

"If you solve government overspending, you solve inflation, which improves the living standards of the average person," Musk said. He added that deregulation would help to eliminate rules and restrictions that make compliance costs "extreme for no reason."

Musk has frequently complained about government overreach and red tape in recent years, making his latest comments unsurprising. But his companies have undeniably benefited from state funds in the form of clean-energy subsidies, tax credits, and space contracts. He may well see those as valuable uses of taxpayer money, and wish to cut waste elsewhere.

Trump and Musk are right to say that prices are significantly higher now than even a couple years ago. However, inflation appears to be falling, freeing the Fed to focus on bolstering growth and avoiding a recession by starting to undo the hikes to interest rates it's made in recent years to curb price growth.