Skip to comments.Bill Gross: This Deal Does Nothing, And We Still Have An "Unfathomable" $66 Trillion In Liabilities
Posted on 08/02/2011 6:35:27 AM PDT by blam
Bill Gross: This Deal Does Nothing, And We Still Have An "Unfathomable" $66 Trillion In Liabilities To Deal With
Aug. 2, 2011, 7:42 AM
Bill Gross's big bet against US Treasuries didn't work out well (latest yield on the 10-year is 2.70%), but nevertheless, as a gigantic bond investor his opinion on debt matters always matters... and obviously he's pretty underwhelmed by the latest "deal."
Here's what scares him the most: $66 trillion in future liabilities:
So, how might this be rectified?
Gross sees four options:
* Balance the budget/growth The current Congressional compromise is but one small step for fiscal solvency. There is no giant leap for mankind anywhere on the horizon. Trillions of further spending cuts, and yes trillions of tax hikes, are necessary to stabilize our official debt/GDP ratio of 90% or so. One important detail to keep in mind: projected deficits in 2012 and 2013 of 7-8% of GDP rely on OMB growth estimates of 3%+ in the next few years. Recent trends give pause to these estimates as does PIMCOs New Normal, which believes 2% not 3% is closer to reality. If so, deficits move right back up to near-double-digit percentages of GDP. Likewise, should interest rates ever rise from current 2% average levels, a 100 basis point increase raises the deficit by 1% and erases any hoped for gains. Sisyphus would be familiar with this seemingly unsolvable dilemma.
* Unexpected inflation While markets are global these days, figures sometimes lie and policymakers often figure. Focusing investors attention on statistics emphasizing core or chain-linked methodologies can entice investors to stay home, or in the case of foreign nations, to invest American. Central bankers, not just in the U.S., but the U.K.
(Excerpt) Read more at businessinsider.com ...
How much is a trillion:
* A million seconds is almost 12 days.
* A billion seconds is 32 years.
* A trillion seconds is 32,000 years.
"Few Americans are aware that the dollars recent 12-month depreciation of over 15% is an explicit tax on their standard of living."
Maybe we ought to reduce taxes to increase revenue.
|In $ Trillions||2012||2013||2014||2015||2016||2017||2018||2019||2020||2021|
|Health and Human Services||$270||$299||$329||$361||$395||$414||$434||$454||$475||$496|
These “unfunded liabilities” are not debt.
The DJIA opens down 76.
The table above points out something that few ever bother to mention: the biggest future liability is not SS or Medicare, but it is Medicaid. Medicaid $35 trillion, Medicare $23 trillion and SS $8 trillion.
We hear the moaning and accusing and hand-wringing about what is destroying the nation in the opposite order of reality. The thing ruining our financial present and future are the mushrooming welfare type programs that now total $950 billion per year, with Medicaid being the biggest part.
When boner and cantor passed tarp, I told the little woman that in five years a twelve oz. Coke would cost five dollars . I will not miss it by much.
That compound interest is growing by leaps and bounds.
He doesn't read the New York Times for Financial Advise.
The bill. Thank you, Mr. Speaker.
LOL Apparently he does. However, the real truth is we are 52 trillion in debt with compounded interest growing by leaps and bounds daily. That is what is strangling us.
These people should be in prison.
Ass clowns Boner and Cantor don’t care.
And they are going to raise our taxes by Trillions.
They are scum that need to be removed if the country is to have any chance of survival.
Lots of folks have opinions on the budget/debt deal, but Bill Gross’ opinion counts. As the director of the world’s largest fixed income investment fund, he literally puts big money where his mouth is. Lately, Gross has pulled funds from the US Treasury market.
One may disagree with Gross’ opinions, but smart money listens well.
Death, Taxes, and Bill Gross will talk down the economy.
He might have a point, this time. But, it's just because of the blind squirrel theory, rather than any penetrating insight.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.