One of the most influential investors in the world of finance has a message for conservative lawmakers...

[one...two...tree 2,762]

One of the most influential investors in the world of finance has a message for lawmakers -- particularly conservative lawmakers -- on Capitol Hill: rejoin the real world.

In a prospectus for clients, Bill Gross, a co-founder of investment management giant PIMCO, says members' of Congress incessant focus on deficit -- and in particular, the manner in which they obsess about deficits -- is foolhardy, and a recipe for disaster. What the country needs, Gross said, is real stimulus now, and a measured return toward fiscal balance in the years ahead.

"Solutions from policymakers on the right or left, however, seem focused almost exclusively on rectifying or reducing our budget deficit as a panacea," Gross writes. "While Democrats favor tax increases and mild adjustments to entitlements, Republicans pound the table for trillions of dollars of spending cuts and an axing of Obamacare. Both, however, somewhat mystifyingly, believe that balancing the budget will magically produce 20 million jobs over the next 10 years. President Obama's long-term budget makes just such a claim and Republican alternatives go many steps further. Former Governor Pawlenty of Minnesota might be the Republicans' extreme example, but his claim of 5% real growth based on tax cuts and entitlement reductions comes out of left field or perhaps the field of dreams. The United States has not had a sustained period of 5% real growth for nearly 60 years."

Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, "they will come." It is envisioned that corporations or investors will somehow overnight be attracted to the revived competitiveness of the U.S. labor market: Politicians feel that fiscal conservatism equates to job growth. It's difficult to believe, however, that an American-based corporation, with profits as its primary focus, can somehow be wooed back to American soil with a feeble and historically unjustified assurance that Social Security will be now secure or that medical care inflation will disinflate. Admittedly, those are long-term requirements for a stable and healthy economy, but

fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth

. Fed Chairman Bernanke has said as much, suggesting the urgency of a congressional medium-term plan to reduce the deficit but that immediate cuts are self-defeating if they were to undercut the still-fragile economy.

Emphasis added. Gross recommends a swift, deficit-financed investment in infrastructure. "[G]overnment must take a leading role in job creation," Gross said. "Conservative or even liberal agendas that cede responsibility for job creation to the private sector over the next few years are simply dazed or perhaps crazed.... In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they're sitting pretty as it is. Government must step up to the plate, as it should have in early 2009. An infrastructure bank to fund badly needed reconstruction projects is a commonly accepted idea, despite the limitations of the original "shovel-ready" stimulus program in 2009."

Unfortunately for Gross and those who share his concerns, the fight over the debt limit seems driven by Republicans hungry for long-standing ideological victories and Democrats cowed into an anti-stimulus fervor whipped up by the right. To many observers it appears that fixing the currently broken economy isn't really what this is about.

http://tpmdc.talking...y.php?ref=fpblg

Edited June 21, 2011 by 8TBVBN

[mawilson 2,133]

In a prospectus for clients, Bill Gross, a co-founder of investment management giant PIMCO, says members' of Congress incessant focus on deficit -- and in particular, the manner in which they obsess about deficits -- is foolhardy, and a recipe for disaster. What the country needs, Gross said, is real stimulus now, and a measured return toward fiscal balance in the years ahead.

Well.... you'd expect a Wall Street guy to say that. Stimulus = money in his pocket now.

[Vi-Jay 218]

Bill Gross is completely objective and has no personal motives.

[Ban Hammer 12,878]

at what point does the brain trust think we should start worrying about the deficit?

[Ban Hammer 12,878]

[웃 910]

Obama has been in office 2.5 years.....It will take 25 years to clean up what George Bush left behind!!! We are about a tenth of the way there.

[Darnell 8,478]

PIMCO ? Really? gag.

[Obama 2012 1,714]

Talking Points? Supporting Government Jobs? Gee, sounds like HACK ####### to me.

Of course, what else have we come to expect from someone who only posts HACK ####### day in and day out.

Let's be honest for a minute, really damn honest. WE ARE BROKE AND CANNOT AFFORD FOR THE GUBMIT TO SPEND ANOTHER DAMN DIME. GET THAT INTO YOUR HEAD.

Government CANNOT create anything, it can only inhibit creation. If a Government is credited with creating anything, it means that they did something to inhibit creation first. Always remember that. Government's only power is to regulate first and then deregulate when it goes to far. Same goes for taxation. Government can only steal wealth before it has to give it back. It cannot do anything positive without having a negative effect first.

With that being said, what does government produce? When government spends money, it has to take from others or borrow money to actually accomplish anything. That accomplishment doesn't necessarily have any guaranteed returns, as the government is not in the business of making money. It doesn't employ anyone that produces anything, it doesn't manufacture anything. All it does is steal from those who would make money and do with it as they please.

Ford Motor company buys materials from other businesses and in return produces a product to be purchased by others that others can use to benefit themselves, so they can continue to flourish and grow as well.

You might try and argue that a government can buy concrete and materials to build roads and bridges, however the capital has to originally be taken from others first, and then the government doesn't stand to make any money off that road or bridge once it's built. The only way it can make money is by forcing others to give them even more money who buy a piece of land off that road, who build something by that road, who have patrons who visit along that road. With taxes, penalties, regulatory fees, payroll taxes, etc. Sure, there's a road there (which the Feds may have had NO HAND in building, could have been a state/local road) but what are those businesses getting from the government in return for their troubles? It's the business who has to buy the equipment, it's the business who has to have a sales pitch to sell their product, it's the business who has to hire employees, pay their salaries, pay their benefits, etc. It's the business that has the RISK involved. Yet all government does is demand money with no returns? That's what you call theft and a load of ####### frankly.

Of course the libs on this board will get all huffy about this post and angry that I would dare back business over government. Keep in mind, there's a difference between small business and big corporations. That's where the left loses. They use "corporations" very liberally, when most small busineses are corporations themselves. So the everyone gets punished just because people hate BIG EVIL Wal-Mart. It's time to stop and smell the roses of what a business really is and what it doe for the community that government can never do, and that's give something back. Government can only take, and take some more, and then take some more. It can never give anything without trying to be Robin Hood first. The problem with this Robin Hood though, is it doesn't discriminate who it steals from. It will take your money whether your the richest man on the planet or your the poorest ant on the hill.

[Vi-Jay 218]

Well stated DJ.

[mawilson 2,133]

Let's be honest for a minute, really damn honest. WE ARE BROKE AND CANNOT AFFORD FOR THE GUBMIT TO SPEND ANOTHER DAMN DIME. GET THAT INTO YOUR HEAD.

Our tax revenue is close to 4 trillion dollars per year. That's a lot of dimes.

It's just a matter of spending the money wisely.

[Obama 2012 1,714]

Our tax revenue is close to 4 trillion dollars per year. That's a lot of dimes.

It's just a matter of spending the money wisely.

You know what I mean.

We can't sit here and worry about new projects and ideas until we get other things under control. Be it social programs, military spending, etc.

Everyone seems AOK with spending more money that we don't have, and that is our biggest problem.

We don't need to spend any money on anything new until the budget is greatly trimmed and a good chunk of money is set to paying more than just the interest on our debt every year. We need to be paying the principal on it too.

[mawilson 2,133]

We can't sit here and worry about new projects and ideas until we get other things under control. Be it social programs, military spending, etc.

Why can't we have new projects if we cut old ones?

[Obama 2012 1,714]

Why can't we have new projects if we cut old ones?

that's what i just said.... re-read my post.

[Mr. Big Dog 10,747]

what else have we come to expect from someone who only posts HACK ####### day in and day out.

Not much, Paul. We do not expect much from you at all.

[Vi-Jay 218]

Not much, Paul. We do not expect much from you at all.

C'mon DJ often presents good arguments. I expect alot out of him and he usually delivers. As do you.