US
Is in Even Worse Shape Financially Than Greece: Gross By Jeff Cox | Monday,
13 Jun 2011 | 10:33 AM ET
When adding in all of the money owed to cover future liabilities
in entitlement programs the US is actually in worse financial
shape than Greece and other debt-laden European countries,
Pimco's Bill Gross told CNBC Monday.
Much of the public focus is on the nation's public debt,
which is $14.3 trillion. But that doesn't include money
guaranteed for Medicare, Medicaid and Social Security, which
comes to close to $50 trillion, according to government
figures.
The government also is on the hook for other debts such
as the programs related to the bailout of the financial
system following the crisis of 2008 and 2009, government
figures show.
Taken together, Gross puts the total at "nearly $100
trillion," that while perhaps a bit on the high side,
places the country in a highly unenviable fiscal position
that he said won't find a solution overnight.
"To think that we can reduce that within the space
of a year or two is not a realistic assumption," Gross
said in a live interview. "That's much more than Greece,
that's much more than almost any other developed country.
We've got a problem and we have to get after it quickly."
Gross spoke following a report that US banks were likely
to scale back on their use of Treasurys as collateral against
derivatives and other transactions. Bank heads say that
move is likely to happen in August as Congress dithers over
whether to raise the nation's debt ceiling, according to
a report in the Financial Times.
The move reflects increasing concern from the financial
community over whether the US is capable of a political
solution to its burgeoning debt and deficit problems. READ
MORE >>>>>