Bill Gross, Pimco’s bond fund manager-king, may be a Republican, but he holds some decidedly Democratic stances on the economy. For example, Gross supports a major government-sponsored jobs program to improve the nation’s infrastructure.
“You’ve got to create a demand for labor. The private sector is not going to do it,” he tells The New York Times. A move by the government to “put a shovel in the hands of somebody can be productive.”
Gross also supports major tax increases. The formula of $1 in tax hikes for every $3 in spending cuts that was part of the failed “grand bargain” negotiated by President Barack Obama and House Speaker John Boehner earlier this summer just won’t do the trick, Gross says.
“How about one-to-one?” he suggests.
Addressing a separate subject, Gross says Wall Street’s famed “bond vigilantes” are no more.
“The true vigilantes” now are China and the Federal Reserve, he says.
Gross isn’t the only one calling for fiscal stimulus. Nobel laureate economist Paul Krugman for months has been touting the need for more government spending. Recently he even fantasized the notion of an alien invasion to spark stimulus.
“If we discovered that space aliens were planning to attack, and we needed a massive build-up to counter the space alien threat, . . . this slump would be over in 18 months,” Krugman told CNN, referencing an episode of The Twilight Show about aliens and world peace.
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