Great news: We’re in worse shape than Greece

posted at 4:50 pm on June 13, 2011 by Ed Morrissey

Think anyone on tonight’s debate panel will want to offer a response to Pimco’s Bill Gross?  The man who runs the world’s largest mutual funds told CNBC today that the US is in worse financial shape than Greece, which is really saying something, considering that S&P just made them the lowest-rated country in the world for bond security, below even Pakistan.  Gross wonders who will be buying Treasury bonds after the Fed’s QE2 — and says it certainly won’t be Pimco:

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 told CNBC that Canada or Austria is a much better bet these days.  If Greece ends up melting down, investors won’t seek shelter in the dollar, but in German debt instead.  With our “ugly balance sheet,” the US is no longer a safe bet.

Greece fell three levels on the S&P rating scale, as the bond agency warned that any debt restructuring would be viewed as a default:

This was the latest blow for the country’s Socialist government, which is scrambling to push a new austerity package through parliament to clinch continued funding under a year-old bailout plan despite rising public discontent.

Barely a year after Athens was granted a first 110-billion-euro aid package, the European Union, the IMF and the European Central Bank are working on a second funding deal.

It won’t be long before Moody’s and S&P start issuing similar warnings and ratings reductions for the US, unless we start tackling both spending reductions and entitlement reform.  Democrats who have grudgingly begun getting serious about the deficit keep claiming that we shouldn’t touch entitlements at all, but instead raise taxes.  Gross’ warning shows that investors are taking those unfunded liabilities at least as seriously as year-on-year deficit spending and current national debt.  Unless we get serious about fiscal reform across the board, we’ll all be singing, “Greece is the word, is the word, is the word …”

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Thank you President Obama.

crr6 on May 1, 2011 at 10:45 PM

Bishop on June 13, 2011 at 4:52 PM

Sorry for the pun, but the QE2 will sink this country.

Ward Cleaver on June 13, 2011 at 4:52 PM

OBAMA JOKES ABOUT SLOW JOB GROWTH
DRUDGE

http://www.drudgereport.com/

canopfor on June 13, 2011 at 4:54 PM

“Economics? It’s all Greek to me.” — Obama

itsnotaboutme on June 13, 2011 at 4:55 PM

Gross told CNBC that Canada or Austria is a much better bet these days.

Good thing I speak English and can relocate to Canada, because my Austrian is a little rusty.

Doughboy on June 13, 2011 at 4:58 PM

“But how about my last round at Congressional? Two Birdies!” -Obama

search4truth on June 13, 2011 at 4:59 PM

Wow, Cavuto is having Rick Perry on this week and Cavuto teased Perry is going to announce on his show. Stay tuned.

carbon_footprint on June 13, 2011 at 5:01 PM

“We’ve got a problem and we have to get after it quickly.”

“I’ll be on the golf course if any body needs me…” – Obowma

Seven Percent Solution on June 13, 2011 at 5:01 PM

What… did Greece forget to force the rich to pay “their fair share?”

VastRightWingConspirator on June 13, 2011 at 5:01 PM

This is just a bump in the road.

And Mt. Everest is just a low hillock.

Bishop on June 13, 2011 at 5:01 PM

“Don’t make me send a drone to put a cap in your azz!”

Roy Rogers on June 13, 2011 at 5:02 PM

Thank you President Obama.

crr6 on May 1, 2011 at 10:45 PM
Bishop on June 13, 2011 at 4:52 PM

As I was reading, that is the exact same thing that kept running thru my head.

capejasmine on June 13, 2011 at 5:03 PM

“Michelle’s calling. gotta go!”

Roy Rogers on June 13, 2011 at 5:03 PM

Wait a minute. Just last week you told us we were enjoying a mild recovery and a double dip was a 50/50 proposition. Now we’re worse off than Greece? So Greece is enjoying a robust socialist recovery while ours is merely what, a “bump in the road”, a “blip”? I’m sooo confused. We need another Warren Harding as President and all Harding Repub candidates too. Recall Harding’s recovery policies for the great depression of 1920-21. It was over in 18 months and ushered in “The Roaring Twenties”.

JimP on June 13, 2011 at 5:04 PM

“Taken together, Gross puts the total at “nearly $100 trillion,…”

In the next election…

… We should all stay home so people will see just how bad Obowma can get!

Oh, wait…!

/

Seven Percent Solution on June 13, 2011 at 5:08 PM

DWS-”We’ve turned this economy around.”

vcferlita on June 13, 2011 at 5:08 PM

Greece is the word.

Left Coast Right Mind on June 13, 2011 at 5:10 PM

Change.

visions on June 13, 2011 at 5:11 PM

You know what we need? More government spending!

/ Paul Krugman’s next column

Vyce on June 13, 2011 at 5:13 PM

Worse financial shape than Greece?

Fixing that means a lot more than just putting a Republican in the White House and taking back the Senate …

Fixing that requires A SINGLE MINDED DEDICATION toward untangling everything that Obama did during his four year term. Every single bit of it – and, it’s gonna be hard to even find it all – so much was done under the table.

And by “untangle” – that means ObamaCare goes out the window ASAP. It also means … since we’ve spent ourselves into debt to the tune of TRILLIONS – and no matter who’s in office – we won’t get that money back …

It means DEEP CUTS in discretionary and entitlement spending. And when I say “deep cuts” – I’m talking about spending no more than 15% of GDP in collected tax revenues because – that is the MAXIMUM we can count on collecting until we fix this crap.

Electing a Republican to “oversee the collapse” will do nothing but get Conservatives the blame when it finally happens.

It’s not just “Beat Obama at all Costs” – unless you can find a hero in the field of Republicans – it’s best to lay hands off and let Obama crash and burn.

HondaV65 on June 13, 2011 at 5:13 PM

President Genius once again reveals himself to be an economic illiterate:

President Obama announces a program to train 10,000 new engineers a year.

Comments accompanying this article are priceless.

Mike Honcho on June 13, 2011 at 5:15 PM

Well, that’s Gross.

Falz on June 13, 2011 at 5:15 PM

Too bad we’re all getting Greased for the finale.

VikingGoneWild on June 13, 2011 at 5:16 PM

“You see, Brian (Williams), I have a gift.”

Marcus on June 13, 2011 at 5:17 PM

We’ve hit a few bumps in the road…

It’s just a flesh wound!

bitsy on June 13, 2011 at 5:19 PM

Joe the Plumber is shaking his head right now.

Roy Rogers on June 13, 2011 at 5:20 PM

As I was reading, that is the exact same thing that kept running thru my head.
capejasmine on June 13, 2011 at 5:03 PM

I think half the people here have that gem saved, it’s usually a race to get it posted first.

Bishop on June 13, 2011 at 5:26 PM

Too bad we’re all getting Greased for the finale.

VikingGoneWild on June 13, 2011 at 5:16 PM

Not going to be any lube involved, I expect.

paragon27x on June 13, 2011 at 5:27 PM

Kursk was just a flesh wound for the German army.

Bishop on June 13, 2011 at 5:27 PM

Kursk was just a flesh wound for the German army.

Bishop on June 13, 2011 at 5:27 PM

And Stalingrad was a simple blemish on the furniture for them, compared to this report.

Johnnyreb on June 13, 2011 at 5:34 PM

The ‘smart’ Commander in Chief, however, offered to bail out Greece.

Hasn’t done squat to bail out U.S.

Media, you whores and Obama-asscrawlers, focus…right, you can’t because you eat/breathe what you dwell in.

Schadenfreude on June 13, 2011 at 5:37 PM

DWS-”We’ve turned this economy around.”

vcferlita on June 13, 2011 at 5:08 PM

Yes, FROM thriving prosperity..

Progress, Obama Style!

Chip on June 13, 2011 at 5:39 PM

Soooo…we’re out of the ditch and being towed to the junkyard.

Fantastic.

TexasDan on June 13, 2011 at 5:43 PM

Okay, seriously – this means Obama must go NOW, not in another 16 months.

More than enough basis for “high crimes and misdemeanors” going on in this willful destruction of the economy and currency, blatant multiple violations of the Constitution, etc.

Now.

NOW.

RIGHT F@#$ING NOW.

Midas on June 13, 2011 at 5:43 PM

People like those of us who post here are full in the knowledge that America as we have known it all our lives is just about to vanish.

And we know the whos, the whats the wheres and the whys…

But for some reason we live in a fool’s paradise. Most people have no idea how this economy works, yet they advocate for people and policies that are completely at odds with their own self interest – and then hurl invectives at those of us who point out the error of their ways.

But one of these days, we are going to get up and go to work, stop to fill up the car with gas, and the AMEX isn’t going to work. Then, thinking that we might have been a little late with the payment, we’ll try the MasterCard, then the Visa, then the debit card. Then we’ll become aware that everyone else around us is doing the same thing – and having the same result.

Then it will dawn on everyone that they’ve been “cut off”. They have no currency because we rely upon a system of cashless exchange that has no underlying tangible value – not that the dollar is worth the paper it is printed upon anyway.

So then, everyone will have the same notion and will descend upon every ATM in sight – to no avail because the same system that allows the credit cards to work also takes care of ATMs.

And that system is where I think the economic collapse will first be felt.

Then panic will set in.

All it will take is just one innocuous piece of straw to fall in just the right place and the camel’s back will break.

And when that happens, we will ALL be conservatives. Just as in the old saw that says that there are no atheists in foxholes.

But by then, it will be too late. The apocalypse will have overcome its moment of inertia.

Nothing will stop it then.

turfmann on June 13, 2011 at 5:56 PM

here’s a long piece from walter russell mead that pretty well sums up the last 100 years.

the Rs have been in this all the way up to their necks. Morons like Fred Upton who can’t be moved to try to rescind his illegal light bulb bill show that many Rs won’t lift a hand. I assume the Upton go some pretty big donations from GE…and so he’s a bought man.

r keller on June 13, 2011 at 6:01 PM

turfmann on June 13, 2011 at 5:56 PM

+++++++++
Ten Things Update: 2011

1 You should be out of any floating-rate debt, and to the extent possible, be out of fixed-rate debt.

2 You should have been saving 10% of your gross income and have two years of this available to you; that translates into at least 4 months of your current gross income.

3 GET AWAY FROM THE TBTF INSTITUTIONS!

4 If you have re-entered the stock market and made money, determine where your exit points are and be damn sure you’re comfortable with the risk.

5 Be prepared to “shelter in place” or “bug out” as appropriate.

6 You already have the lawful means of self-defense, right?

7 Once again look at who your friends are – and aren’t.

8 Remember the first rules from Zombieland. No, not “double tap.” Cardio.

9 Wanna be short in the market right now?

10 Do not count on entitlements of any sort.

Insert witty screen name here on June 13, 2011 at 6:03 PM

How soon before quadrillion replaces trillion?

MarkT on June 13, 2011 at 6:03 PM

Repeal the New Deal and we will be much better off fiscally. Overnight, those big scary deficit numbers vanish.

As incompetant and terrible as he is, this isn’t Obama’s fault. We’ve tried to have socialism and capitalism together, for decades. Were going to have to choose one or the other, and soon.

Revenant on June 13, 2011 at 6:07 PM

Greece must have had a huge housing bubble, been shipping their manufacturing base to China and ongoing illegal immigration problems.

Dr. ZhivBlago on June 13, 2011 at 6:09 PM

Repeal the New Deal and we will be much better off fiscally. Overnight, those big scary deficit numbers vanish.

As incompetant and terrible as he is, this isn’t Obama’s fault. We’ve tried to have socialism and capitalism together, for decades. Were going to have to choose one or the other, and soon.

Revenant on June 13, 2011 at 6:07 PM

I think the PIIGS and France proved how impossible a task that is.

Steve Eggleston on June 13, 2011 at 6:12 PM

Zero’s right, this didn’t happen overnight and we can’t fix it overnight. The progs have been greasing our skid into oblivion for 80 years or more. A lot of voters became disillusioned after Nov ’10. That was just a meager beginning to what will be a major battle between the entitled and those paying for it. I’m not a bump in the road and I ain’t bending over anymore.

Kissmygrits on June 13, 2011 at 6:21 PM

But that doesn’t include money guaranteed for Medicare, Medicaid and Social Security

Money for Medicare, Medicaid and Social Security is not “guaranteed”. Unlike Medicare, Medicaid and Social Security, our $14.3 trillion in real debt has been spent. Our $14.3 trillion in real debt does not have hundreds of millions of future creditors scheduled to pay into it for decades until we owe it. Comparing the two as this article misleading.

$14.3 trillion is enough reason to balance the budget immediately without this nonsense.

elfman on June 13, 2011 at 6:23 PM

How soon before quadrillion replaces trillion?

MarkT on June 13, 2011 at 6:03 PM

Somewhere between QE-5 and QE-6

elfman on June 13, 2011 at 6:26 PM

Concur. Cut spending NOW!! Go back to pre-TARP budgets NOW!

Khun Joe on June 13, 2011 at 6:26 PM

Zero’s right, this didn’t happen overnight and we can’t fix it overnight. The progs have been greasing our skid into oblivion for 80 years or more.

In other words, the Modern Liberal/Progressive/statist ideology is a failure. It started with the New Deal and now here we are… stuck with the results of Liberal Republicans and Democrats.

Over the years, a Leftist political victory in America was advancing their agenda. A conservative victory was stalling their agenda.

Modern Liberalism will never work over an extended period of time. Anywhere, any time. It just won’t. Sorry Libs. Ask yourself: do you care about the poor and less fortunate, or not? If so, you need to start voting for the most conservative Republican possible, from here on out. If you don’t understand why, then you’re an economic illiterate.

visions on June 13, 2011 at 6:32 PM

Yet Zorba Obama is pledging billions to THEM!

Hening on June 13, 2011 at 6:40 PM

Here’s an idea, how about we raise taxes on everyone who supported Obama as well as cut their benefits while the rest of the sane people try to piece everything back together. They wanted Hope n’ Change, now they can suck on it!

jawkneemusic on June 13, 2011 at 6:42 PM

Maybe to cheer folks up we should have a poll to see whose picture should be on the new $1K, 5K, 10K, 50K, 100K, and 1M US dollar bills? Get on that Ed.

PS: Or do we just use Yuan?

slickwillie2001 on June 13, 2011 at 6:45 PM

Ah, it’s a wild ride in the Cloward Piven “roller-coaster from Hell.” The strategy of the Prog-left Democrats (oxymoron) has been pretty clear for several decades. We are now entering the crucial phase according to the Cloward-Piven playbook. To illustrate, here’s a little math. Approximately 40% of the annual federal budget is financed by deficit spending and borrowing. If one briefly examines the 2010 budget breakdown the total of discretionary and defense spending amounts to… surprise! 40% of the total for the year! Essentially, this means that – leaving aside interest payments on already existing debt – the federal budget funds financed by tax revenues generated from the current economy are used IN THEIR ENTIRETY for redistribution to the segments of the population chosen by the political class. Thus, essentially, it’s a vast transfer of income from the younger productive segment of the population to the old/”poor”/”disabled” segment of the population.

To all intents and purposes the initial objective of Cloward-Piven, as David Horowitz puts it, to “hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse” is up and operational. Look around you, and particularly at what our overlords in Washington are doing. We are in the crisis. What comes next? Recovery of the traditional American principles or the “bust-up.” The Cloward-Piven adherents, such as Obama, have no clear objectives, that is a vision of what a “better” society will look like after the destruction of the existing order. They just know that they are both more intelligent and more compassionate than you are. So what they wish… well, you shall receive!

boqueronman on June 13, 2011 at 7:20 PM

We’re in worse shape than Greece

woohoo…lets raise the debt ceiling, max it out and declare bankrupcy!

equanimous on June 13, 2011 at 7:58 PM

I feel like Charlton Heston in ‘Planet of the Apes’ when he saw the head of the Statue of liberty lying on the beach. But the real figure may be closer to 200 TRILLION!!!And it gets exponentially worse every second.

Obama in less than 3 years has done more damage to this country than all foreign enemies combined.

MaiDee on June 13, 2011 at 8:18 PM

I am so glad that I bough a bunch of gold and sold my house and business 18 months ago and bought an acre in Hawaii.

I have tons of veggies growing, tomatoes ,peppers,potatoes,carrots,squash,melons,papayas,bok choy,won bok,greens,ginger,bananas,tobacco etc
Plus I’m raising fish,Chickens,Rabbits and soon will have a couple milking goats,

I am off grid with solar panels and used veg oil generator and get plenty off rain that we collect.

Obama and Krugman can kiss my self-sufficient azz!

esnap on June 14, 2011 at 1:47 AM

In other words, the Modern Liberal/Progressive/statist ideology is a failure. It started with the New Deal and now here we are… stuck with the results of Liberal Republicans and Democrats.

Over the years, a Leftist political victory in America was advancing their agenda. A conservative victory was stalling their agenda.

Modern Liberalism will never work over an extended period of time. Anywhere, any time. It just won’t. Sorry Libs. Ask yourself: do you care about the poor and less fortunate, or not? If so, you need to start voting for the most conservative Republican possible, from here on out. If you don’t understand why, then you’re an economic illiterate.

visions on June 13, 2011 at 6:32 PM

Yes…and no.

The Commies didn’t cause all this-they can barely manage individual cities and small countries-they simply aren’t competent.

We had financial panics long before the “Progressives” really had a chance to weasel their way in to power. The collapse of Wall Street that kicked off the U.S. Great Depression was under the very pro-business Hoover. In fact, the Great Depression wasn’t caused solely by stock trading and was worldwide anyway. No one seems to really know why it all happened at any rate. One thing I’m sure of-it wasn’t the Commies and it wasn’t entitlement programs (though they are like throwing a chain around the neck of a drowning man).

No, they’ve been hanging around like vultures for the last 150 years waiting to pick apart the carcasses of Capitalism and Jeffersonian Democracy and replace it all with Socialism.

I know it’s heretical to say, but we might have to face the reality that Capitalism (as we know it anyway) is dying and that its greatest foes actually come from within rather than without.

It’s rather like a machine. No matter how well it works, by its very nature the fact that it indeed does work mean that it eventually wears itself out and has to be replaced. If you make it work harder it will wear out disproportionately faster. If you get low on fuel you have no choice but to slow it down and therefore expect it to do less. If you kick it, ignore repairs, cannibalize parts…

Dr. ZhivBlago on June 14, 2011 at 4:22 AM

Obama in less than 3 years has done more damage to this country than all foreign enemies combined.

MaiDee on June 13, 2011 at 8:18 PM

Making him a non-religious god-like figure to the left.

SKYFOX on June 14, 2011 at 9:13 AM