Reply #25: Pimco's Gross Says Bush Social Security Plan May Fail [View All]

http://www.bloomberg.com/apps/news?pid=10000103&sid=aLefysUDtIbo&refer=us

Feb. 4 (Bloomberg) -- Bill Gross, who manages the world's largest bond fund, said President George W. Bush's proposals for cutting a shortfall in the Social Security trust fund won't work.
That doesn't read like MAY FAIL to me

Bush, in his annual State of the Union address on Feb. 2, suggested putting money into ``a conservative mix of bonds and stock funds'' to narrow the gap. He has called the shortfall, estimated at $3.7 trillion over the next 75 years, a ``crisis.''

Gross, chief investment officer at Pacific Investment Management Co. in Newport beach, California, suggested instead that the U.S. cut its budget deficit.

``There's your problem, and neither privatization nor any goodly number of government bonds deposited in the Social Security trust fund can solve it,'' Gross wrote in a report published on the firm's Web site yesterday. ``The value of Treasury bonds and even stocks will be valued down in price as they are sold to pay for future goods and services.''

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