The America Party Is A Bad Idea...For Elon
Musk's entry into American civic life has been highly positive. But the legalities surrounding his new political party could derail his plans, and his empire.
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by Rod D. Martin
July 10, 2025
As I’ve said for decades, every so often, someone decides that the world is too corrupt to reform. And they start a political party.
This week, our heroic crusader is Elon Musk, perhaps the greatest genius of our time, which makes him susceptible to believing he knows everything about everything.
Sadly, he does not. No one does. But I know a decent amount about this.
Elon inhabits a world in which his word is law, in which his musings move mountains. And thank God he does. He’s changing the world, in multiple directions at once, as though Thomas Edison and J.P. Morgan had a baby.
That world is the precise polar opposite of Washington.
Politics runs on consensus-building. Whereas entrepreneurship is almost purely creative — sometimes seemingly ex nihilo, in the occasionally downright shocking image of the Creator — governance is zero-sum. No one can have anything without taking it from someone else: there are a fixed number of House seats, and a fixed number of electoral votes, and a relatively fixed (though ever-expanding) number of dollars in the “discretionary” portion of the budget.
This is why Socialists extrapolate this zero-sum political reality to the broader economy and world. They’re wrong, just as Elon is wrong. But politics is their world.
It is not Elon’s world. And he was largely apolitical until a year ago. But he is certain of himself in the manner of a Titan astride the Earth, and who is qualified to tell him he’s wrong?
No one. Not really. But alas, he’s wrong.
A decent amount of ink has been spilled explaining that third parties never work, or if they do, they work to elect those most opposed to their principles. I spilled my share two days ago. I encourage you to read that, because most people don’t understand the things I wrote about, most commentators didn’t address them, and above all, they’re true. They can even save you from doing something stupid someday.
But today I think we need to address the specifics of the America Party and why I not only think it’s doomed to fail, but that for reasons enshrined in law it short-circuits Elon’s ability to make the very changes he’s seeking.
And that’s a shame. But it’s going to matter.
The Misunderstanding
As tempting as it is to blame all of this on his falling out with the President, there’s a reason behind that disagreement. Elon is utterly convinced that the Big Beautiful Bill will balloon the deficit, catapulting the national debt into territory that can only inexorably lead to national bankruptcy. And he believes this because the Congressional Budget Office (CBO) told him — and the rest of us — so.
What he doesn’t understand is that the CBO is lying.
The CBO’s failed static scoring models are wrong. The CBO is wrong. They’ve been wrong my whole life. So wrong so often that it can only be intentional. They’re a central organ of the Deep State Elon’s crusaded against, with a simple mission: convince Congress that all tax cuts will balloon the deficit, while all spending sprees will not.
They’ve followed those marching orders without fail since their founding by an overwhelmingly Democrat Congress in 1974.
They were wrong in the 1980s, when Reagan’s tax cuts were projected to cost the government trillions — and instead ushered in an entire era of massively increased tax revenues from non-inflationary growth. They were wrong in the late 1990s, when nobody believed we’d ever balance the budget again, and they swore to us that Newt’s budgets would shoot the deficit into the stratosphere — until we actually produced massive surpluses, and actually began paying down the debt, for four straight years (ended only by the surge in spending following 9/11).
They were wrong again with the Bush tax cuts in the early 2000s. How wrong? You almost have to see it to believe it:
But once you see it, you can’t unsee it. Yes, a massive tax cut led directly to a more-than-doubling of tax revenue, which CBO promised was not possible.
Turns out the CBO’s static scoring doesn’t account for the greatly increased tax revenues that come from greatly increased economic activity. You know, because they’re all Democrats, and they want bigger government and higher taxes. And they need you to buy the lie.
Don’t believe me? Look at the difference between those instances and these: the CBO’s rosy scoring of Obamacare, the mislabeled “Inflation Reduction Act”, and Biden’s 2023 plans.
These are far from the only instances of the CBO skewing numbers wildly against Republicans and unbelievably for Democrats. You know…because they’re Democrats. The CBO is a key institution of the Deep State.
They were wrong again, by the way, in 2017, when President Trump’s first round of tax cuts “couldn’t possibly” pay for themselves…but did.
Economic growth changes everything. At just the projected 2.7% annualized growth — a lot more than Obama’s 1.8%, a lot less than the 3.4% annual growth the U.S. averaged from 1950 until Obama — budget deficits turn into budget surpluses in short order. At 3% we start paying off the debt pretty quickly. At 4% the debt becomes a memory.
It isn’t magic. It’s math. It’s also not a theory. We’ve seen this play before.
Only Two Ways to Avoid Bankruptcy
So we have competing theories of how to prevent the spiraling debt from crashing the country. Let’s ignore discussion of the dollar’s status as the global reserve currency: at some point, the debt reaches levels that render that moot. Thus for our purposes the possibilities are:
Growth (see above)
Slashing entitlements
Why? Because discretionary spending is just 29% of the federal budget, and a lot of what counts as “discretionary” isn’t. Half of it is defense spending. Can you cut defense? Sure. Can you cut it out completely? Not even close. Are you likely to cut it at all? No, you’re probably going to increase it — a lot — because we just got our NATO allies to agree to spend 5% of GDP on defense, a huge increase for everyone, including us.
Now here’s the problem. All discretionary spending combined is $1.8 Trillion. But so is the deficit. The nondiscretionary portion — entitlements plus interest on the debt — consumes 100% of federal tax revenue. And a great deal of the “discretionary” portion — not just defense but also law enforcement, courts, air traffic control, embassy staff, national parks, environmental protection, everything — isn’t actually something anyone’s willing to cut, much less eliminate.
Remember: the entire “discretionary” budget is equal to the entire federal deficit.
This is why kicking illegal aliens off Medicaid was so important. This is why DOGE rooting out waste and fraud matters. This is why tariff revenue is going to become important. Every little bit helps, and there’s a lot of ground to cover.
But we’re kidding ourselves if we think we can cut our way to solvency by trimming “discretionary” spending. The big bucks are in Social Security, Medicare, Medicaid, pensions, and so forth. There is no means to cut our way to a balanced budget — or a reduction in the debt — without slashing those. Don’t believe me? Ask Paul Ryan.
Trump’s strategy is growth. Elon’s strategy is cuts. Both are necessary. But if you deny that the first one is possible (as CBO does), you’re just going to fail. Because no one’s throwing grandma off Social Security.
Who Is The Constituency For This?
But it gets worse. Elon is on the record for a vast increase in H-1B visas. He’s also a strong supporter of Universal Basic Income: putting literally everyone on a new form of welfare because (in his view, which I believe to be incorrect) the robots and AI he means to sell you will eliminate your job. And of course he’s for that too.
How he means to pay for that while also slashing spending is anyone’s guess. He clearly hasn’t thought it through, though ironically it depends on a growth model more ambitious than Trump’s.
And wait, there’s more: he says the America Party will be centrist, particularly on social issues, which means it will probably be for abortion and transgenderism. But wait! He’s said explicitly (and smartly) that the Party will be pronatalist, which means abortion may be off the table. And he’s personally horrified by the transgender movement. None of that sounds centrist at all.
Even if it did, Margaret Thatcher said it well: the problem with standing in the middle of the road is that you get hit from both sides. In this case, possibly hitting himself.
So who exactly is going to vote for this mishmash?
Republicans believe Trump’s growth strategy because it’s worked before. Democrats (and most Republicans) would rather chop off their arms than cut entitlements. MAGA hates H-1B visas (which I think a mistake), because they see it as another way to game the immigration system. Labor unions hate them too. UBI loses all fiscal conservatives, the ostensible audience for this new party. Robots and AI creep everybody out (though we’re all going to buy them). And no matter where he lands on abortion, transgenderism, and other social issues, he loses half or more of the country.
Can he just refuse to address such issues? Of course not. No position is a position, and everyone over the age of five knows it.
The thing is, we’ve seen this play too. It was a long-time fetish of the pundit class, a “third way” they were certain could win 50 states. It was given expression on The West Wing in Arnie Vinnick (played by Alan Alda), and in the real world by the presidential campaign of Rudy Giuliani. The premise was this: America is hungry for a fiscally conservative social liberal. That’s what they want. That sweeps the country.
But it didn’t. Widely proclaimed “inevitable” (like Hillary), Giuliani started his race as the prohibitive Republican frontrunner, before Republicans learned he was for taxpayer-funded abortion and completely abandoned him. His fantastically funded campaign won zero delegates, even worse than Jeb!’s three delegates eight years later. Even on The West Wing, the writers had a change of heart and let “50-State Vinnick” go down to defeat.
As I’ve always said, if voters want a Democrat, they’ll vote for a real one.
This is why at the outset I said the America Party is a terrible idea…for Elon. Rather than targeting bad actors in Congress on specific winnable issues, he ends up alienating everyone and electing no one. Might he peel a few votes off the Republicans, at least at the margin? Yes, and he might give Congress or even the White House to the Democrats in the process, at which point he’s going to face endless lawfare and the threat of nationalizations, which will do nothing good for his net worth.
And that’s before we get to the legalities.
The Campaign Finance Problem
Campaign finance law is pretty arcane. It’s not something Elon, or you, have probably thought a lot about. But in a nutshell, it’s designed to keep rich people from buying elections.
Did you catch that?
Now you might point out that there are loopholes, and you’d be right. The biggest is right there in the First Amendment: giant media conglomerates can say anything about a candidate they want, and spend billions of dollars to do it. Beyond that, there are also Super PACs, to which anyone can give an unlimited amount of money and spend it to elect or defeat whomever they will. That’s free speech, and it’s the law.
But what about a political party?
The law is very clear: there can be no coordination between a Super PAC and a party or a candidate. And that’s a problem for the new leader of the America Party, because if he spends money through his Super PAC, he’s going to prison.
Well, he’ll just spend that money through his new party, you might say. But no, he won’t. Contributions to parties (like candidates) are strictly limited, at numbers far lower than the cost of anyone’s campaign. Why? To keep candidates from being bought. All these people are going to have to raise their own money, and not from Elon. Yes, he can give larger sums for voter registration and other party-building activities. But the money isn’t fungible, and it’s tightly monitored as a matter of law. So again, prison.
The truth is, Elon’s smartest play was, and still could be, a Super PAC. It would give him unlimited ability not only to spend whatever he wants for or against anyone he chooses, and it would also provide a legal shield from having to care what the targets of his largesse think about his strategy for their campaign: coordination is illegal. He could romp and stomp in the Republican primary, or anywhere else he chose. Easy peasy.
Forming the America Party is the one thing that grinds all that to a screeching halt, and puts the lion’s share of his money back on the sidelines.
How Elon Could Lose Tesla
Most of Elon’s companies are private. But the jewel in his crown, from a net worth perspective, is not.
On the first trading day after Elon’s announcement, Tesla’s stock dropped 7%. That’s a lot. It posted another down day yesterday.
The backlash has already begun. Analysts are keen to see Elon focus on business. Elon’s response was…unfriendly.
This matters, but not necessarily for the reason you think. Elon only owns 12.8% of Tesla (20.5% if his 2018 compensation plan is upheld on appeal). That means 87% of Tesla is owned by…other people, mostly institutional investors (47%) like BlackRock, State Street, and Vanguard.
Their politics is extreme left: they are the engines of ESG and DEI in America, on which Elon has declared war. But he’s integral to Tesla and can’t possibly dislodged…
…unless he gives them cause.
No one wants that. At least not now. The Optimus rollout alone makes him essential. But only if he’s there. He’s been away a lot lately, not exactly living on the factory floor for three years as before. Running a political party is all-consuming. Starting one is an order of magnitude greater still. And there are only so many hours in the day, even for guys like Trump and Musk.
The truth is, if the board lets him disappear and doesn’t replace him, they violate their own fiduciary duty. And that leaves each of them vulnerable to shareholder derivative suits, investigations, and enforcement actions that could force their hands.
Could this be the opportunity — or worse, the necessity — to replace him as CEO? At the very least it could be a rearguard action he has to fight to hold off the countless enemies he’s made or is about to make in both parties, not just one. And make no mistake: these are people who know exactly how to tie him in knots, in boardrooms, in shareholder meetings, and in the courts.
And of course the greatest expert alive on all those things is Donald J. Trump.
None of this is going to help Tesla’s stock price.
All of This Has Happened Before
I’m not one to bet against Elon. But this has happened before.
In 2000, Elon was CEO of a still-new PayPal. He was a good CEO, and a good guy to work for. Everyone thought so. But in a moment of seemingly autistic focus, he latched onto an idea to re-engineer the entire PayPal codebase, something the engineering team dogmatically refused to do.
It was thoroughly unnecessary. Even if achieved, it did not add enough value to justify the cost, the time, or the risk. And as you might have noticed, PayPal did just fine without that change.
So what happened? The coders more or less stopped working for most of a summer, and the game of chicken continued until someone acted. Suddenly Elon was out as CEO, despite being the largest individual shareholder. It happened very gradually, and then very suddenly.
Who was the new CEO? J.D. Vance’s former employer (and mine) Peter Thiel. Who led the coup? Donald Trump’s AI and Crypto Czar David Sacks.
Small world.
As I’ve watched the recent events play out, I’ve been constantly reminded of this. Elon went from being Donald Trump’s best friend to his worst nightmare in record speed. Why? I believe that in a way only Elon could manage, he became so intensely focused on the problem right in front of him — DOGE’s mission, both narrowly and broadly defined — that he was unable to see anything else, including rational explanations from friends of the limits of the legislative process and the plan to create enough growth to work around it.
Is that what happened? I don’t know. But it’s happened before.
It’s Not Too Late to Change Course
Elon Musk is more brilliant than even most of his fans appreciate, and a genuine visionary in ways few will grasp even after we’re all gone. His entry into American civic life has been a huge blessing.
The America Party torpedoes all of that. The Democrats won’t stop hating him. The Republicans are going to hope he changes his mind until they give up that hope, and then they’re going to look for ways to screw him.
Am I suggesting they should do this? Heavens no: I’m horrified by it! But this is how the world works, and Washington even more so.
Elon can accomplish everything he wants (and in a fraction of the time) through a Super PAC, with a smart strategy that almost writes itself. Everything else is overengineering. That will cost dearly, as it always does.
In America third parties are a bad idea generally, but this one is a terrible idea in particular. It straitjackets Elon’s ability to spend the kind of money he must if he’s to create the change he seeks. And it puts him in constant danger of crossing lines — or being investigated for crossing lines — with which he is not familiar and which could put him in prison and destroy his dreams.
Some of these bridges can’t be unburned. Best not to burn them in the first place.
I think the world of Elon. I pray for him literally every day. I want to see him make humanity a multiplanetary species, and achieve countless other world-changing things most have not yet imagined. And I absolutely want to see the waste, fraud, and corruption rooted out of Washington, which Elon can play an essential role in doing.
But this is not the way.
Great article! I totally agree with everything you stated. I too am a huge Elon admirer, who is genuinely concerned about this direction. I hope Elon reviews your comments and considers your suggested path. I have enjoyed reading all of your articles and upgraded to Founding member today.
Rod , how can you use your influence to help reverse this terrible idea ?