Bill Gross on Debt Ceiling: Lawmakers ‘Don’t Get’ the Implications
July 15, 2011 By Stephen Grocer
Add Pimco’s Bill Gross to the list of people weighing in on the debt ceiling standoff.
“What they really do not get are the implications going forward,” Gross said on Bloomberg Television. “The U.S. has a $60 trillion net present value liability burden and that constitutes Medicare, Medicaid and Social Security in combination. That is 4-5 times GDP and it certainly exceeds those liabilities in Greece, Portugal and Spain. Ultimately, the U.S. has a big, big problem. What needs to be done, as Chairman Bernanke suggested yesterday, is that we need to approach it very gradually. You cannot cut two or three trillion dollars of spending over a year or two and expect the economy to survive.”
Gross also said that he doesn’t expect QE3, and that “Europe lacks the political leadership to cure the crisis.”
Here’s video of the Bloomberg interview:'>Bill Gross on Debt Ceiling: Lawmakers ‘Don’t Get’ the Implications
July 15, 2011 By Stephen Grocer
Add Pimco’s Bill Gross to the list of people weighing in on the debt ceiling standoff.
“What they really do not get are the implications going forward,” Gross said on Bloomberg Television. “The U.S. has a $60 trillion net present value liability burden and that constitutes Medicare, Medicaid and Social Security in combination. That is 4-5 times GDP and it certainly exceeds those liabilities in Greece, Portugal and Spain. Ultimately, the U.S. has a big, big problem. What needs to be done, as Chairman Bernanke suggested yesterday, is that we need to approach it very gradually. You cannot cut two or three trillion dollars of spending over a year or two and expect the economy to survive.”
Gross also said that he doesn’t expect QE3, and that “Europe lacks the political leadership to cure the crisis.”
Here’s video of the Bloomberg interview:
