Bill Gross: Paul Ryan not good for bond marketAugust 13, 2012: 3:58 PM ET
The world's largest bond investor took to Twitter Monday to air his gripes about Paul Ryan, the newly chosen Republican vice presidential candidate.
GROSS: Do bond markets take heart from Ryan selection? Not me. He talks lower deficits but really believes in lower taxes — exact opposite.—
(@PIMCO) August 13, 2012
The comments from Bill Gross, founder of investing firm Pimco, show the challenges that Ryan may face when trying to convince investors (and voters) that lower taxes can help cut the nation's deficit.
According to Ryan's 2013 budget proposal, he advocates a reformed tax system with just two individual rates of 10% and 25%, a drop in the corporate tax rates to 25% from 35%, and elimination of the alternative minimum tax. Experts say the changes would result in a big tax cut for the rich, and in general, a lot of lost tax revenue. Even though Ryan said he would close some tax loopholes to make up for the gap, he has yet to specify which ones.
So Gross seems to be suggesting in his tweet that Ryan's plan would fail in lowering the deficit, which of course is important when it comes to long-term confidence in the creditworthiness of U.S. debt. Gross would not comment further Monday but Pimco did confirm that the tweet came from him.
Gross has been critical of politicians of both parties' handling of the U.S. fiscal situation though. In an interview with CNNMoney earlier this year, Gross said President Obama was once one of his "great hopes for change" but is now one of his "biggest disappointments." But his words for Republican presidential candidate Mitt Romney were even less kind: "artificial and untrustworthy."