Bill Gross: Entitlements Key To Cutting Federal Budget Deficit
Pimco’s Bill Gross: Entitlements Key To Cutting Federal Budget Deficit
Excerpt:
If the U.S. government was a corporation, Gross maintains, “then it would probably have a negative net worth of $35-$40 trillion.”
Without big cuts in entitlements, Gross paints a not-so-rosy picture. He writes:
“Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates.”
Gross has essentially sold-off his Treasury holdings in the Total Return Fund.
He says that if sitting before Congress, he would say something like:
“I sit before you as a representative of a $1.2 trillion money manager, historically bond oriented, that has been selling Treasuries because they have little value within the context of a $75 trillion total debt burden.”
Comment: Note comment on inflation
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