Gross Says US Is Debt Addict, Looks Long Term When Assessing Precarious Nature Of US Debt

Gross says that the US is a serial offender when it comes to fueling the deficit. He said the US is addicted to debt and frequently pleasures itself with budgetary crystal meth.
The IMF, CBO, and BIS have come up with what they call a fiscal gap, the amount of money it would take to bring the debt to gross domestic product (GDP) ratio under control.
The fiscal gap includes estimated future entitlements from Social Security, Medicare, and Medicaid. The deficit figures do not include these items.
Gross says the key is to view the US debt picture 15 to 20 years down the road. After looking at the studies produced by the IMF, CBO, and BIS, he concludes that either spending must be reduced or taxes increased (or a combination of both) by 11%.
Even if the current tax laws are allowed to expire, the debt would only be reduced by about $200 billion.
He warns that the US could become the next Greece by the time the next decade arrives if measures are not taken to address the fiscal gap.



The debt picture is already improving but there still is no long-term plan by Congress to reduce the deficit. Congress is currently in recess so nothing will be done until after the election and the results of the election are likely to have a significant bearing on the approach taken.

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