Posted on 04/12/2011 5:01:37 PM PDT by bruinbirdman
The US should make a 'down payment' this year on tackling its budget deficit, the International Monetary Fund has warned, as it emerged that the world's biggest bond investor is shorting the country's bonds.
America will rack up a budget deficit of 10.8pc of gross domestic product this year, the largest of any of the developed economies, the IMF said in its latest Fiscal Monitor report.
In sharp contrast to Britain and much of the rest of Europe, the US has so far delayed any move to cut its budget deficit. Instead, through a combination of extending tax cuts and a second, $600bn round of quantitative easing, Congress and The White House have focused efforts on trying to quicken a recovery that failed to take off last year.
Bill Gross, who manages the world's biggest bond fund at Pacific Investment Management Co (Pimco), said it was the failure of politicians in Washington DC to take the country's deficit - estimated to reach about $1.5 trillion next financial year - seriously that has prompted him to start positioning the $236bn Total Return Fund to benefit from a drop in US government bond. In February, the fund sold its US governments bonds, or Treasuries.
"Without attacking entitlements - Medicare, Medicaid and Social Security - we are smelling $1 trillion deficits as far the nose can sniff," Mr Gross said in the firm's monthly outlook.
President Barack Obama, who is facing increasingly loud calls from Republican opponents to reduce the deficit, is expected to lay out measures on Wednesday.
"Market concerns about sustainability remain subdued in the US, but
(Excerpt) Read more at telegraph.co.uk ...
QE3, QE4, QE5, QE6,...”down payment,” no problem. ;-)
Just vote against raising the debt ceiling and then we can’t borrow anymore......simple enough....the eliminate HUD and Dept. of Education etc.
Wasn’t that “huge” 38 billion cut enough?
True, but I was thinking the Presidents down payment would be increasing the debt.
I love it, Bill Gross. The MR. BOND INVESTOR GUY.
Kind of hurts, since U.S. TREASURY BONDS ARE ASSUMED TO BE ZERO RISK IN BOND PRICING MODELS.
Awwww.... the bond markets suddenwy don’t wike that America is maxed out.
But they keep wanting to get IN BED WITH THE DEMOCRAT-REPUB-GREEN ENERGY-SOCIAL JUSTICE-ANTI-CHRISTIAN machine.
And now the machine is going bankrupt.
And now, the sob Bond Investor - does he attack DISCRETIONARY spending - i.e., social programs, the free money give away of taxpayer dollars, paid for by Federal Income Tax ?
No.... He wants to shrink the payouts PROMISED ALL ALONG to us dupes who had SS/MED DEDUCTED SEPERATELY from out paychecks for decades. 6.2% Employee, = 6.2% EMPLOYER !!!!!!
Hello !!!! 12.4% OF EVERYONE’S GROSS PAY WENT TO SOCIAL SECURITY. Now Bill Gross wants Soc. Sec. payouts to stop, while the 800,000 Federal Employees KEEP THEIR JOBS.
Sorry, I just hate getting ripped by the gov’t that badly.
As near as I can make out, our contribution to the IMF is about $600,000,000,000. Perhaps that would be a good first step.
” No.... He wants to shrink the payouts PROMISED ALL ALONG to us dupes who had SS/MED DEDUCTED SEPERATELY from out paychecks for decades. 6.2% Employee, = 6.2% EMPLOYER !!!!!! “
So do a significant number of posters on Free Republic - remember that, to them, we are “Useless Eaters” who are the most selfish people on earth because we insist that our Government live up to its CONTRACTUAL OBLIGATION...
Does anybody remember what FICA is an acronym for?? “Federal INSURANCE CONTRIBUTIONS Act”..
Not “Tax For Any Old Thing Act”......
Defund the IMF. Defund all of the collectivist’s collectives and we are are rich beyond anyone’s dreams.
FIMF!
Life, liberty and the pursuit and destruction of totalitarians and their collectives.
More on Gross...here...
Thanks to the outstanding posters at zerohedge.
I’ve been against the IMF forever ,, The United States for all intents and purposes *IS* the IMF and their policies have done nothing but create havoc. ... I agree , a great first step is to withdraw IMF funding... That should impress them.
yitbos
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