Bill Gross, the bond-fund-manager superstar, not only thinks Barack Obama will be elected president, but that the nation’s budget deficit, now nearly $500 billion, will explode to $1 trillion.

Gross, a registered Republican, wrote an open letter to Obama on the Web site of PIMCO, where Gross is co-chief investment officer. “You have inherited a mess,” Gross writes.

“What do I think you should do as the new president to rectify this mess? All I know is that any solution will come with a high price tag.”

Higher taxes on the wealthy and oil companies won’t make up for the additional spending that Obama will have to approve to pull the economy out of recession, Gross argues.

“So you’re gonna do the tax thing [relief for the middle/lower class], Mr. President, and throw in some form of universal healthcare to boot that your buddy Hillary will help spearhead,” Gross writes.

“In addition, you’ll need to provide some immediate relief to homeowners in the form of FHA subsidies and low mortgage rate loans… By January, home prices will be down another 10 percent or so and our Japanese-style property deflation will be in full stride.”

Put that all together, and you get a massive budget deficit, according to Gross. “You’ll have your tax bill and your healthcare bill and your housing fix, and somehow it’ll all be paid for by wealthy hedge fund managers, oil companies or a robust economy,” he writes.

“Uh, I don’t think so, Mr. President. That’s where the ‘yes we can’ morphs into ‘no we can’t.’ Not that you won’t accomplish most of that. It’s just that you won’t be able to pay for it, and it’s better to admit it now.”

To some extent, the next president will be helpless, Gross maintains. “While the Republicans will blame you for years and label you ‘Trillion Dollar Obama’ in future campaigns, there is in fact not much that you or another president can do,” he writes.

“You’ve inherited an asset-based economy whose well has been pumped nearly dry with lower and lower interest rates and lender of last resort liquidity provisions that have managed to support Ponzi-style prosperity in recent years.”

As the economy needs $500 billion of stimulus, and the budget deficit already totals almost $500 billion, that leaves a deficit of $1 trillion, probably by 2011, Gross says.

To be sure, that still would leave us in better shape than Japan in the 1990s, he points out. The $1 trillion deficit would amount to about 6 percent of GDP, which pales next to the 10 percent figure in Japan in 1998.

But the result won’t be pretty for investors, Gross says. Once the economy recovers, inflation will rise, “as the government bonds acquired during the recession are transformed once again into risk bearing assets and high levels of investment,” he writes.

“That suggests that intermediate and long-term yields on government bonds have already bottomed and will gradually rise throughout your first, and perhaps second, administration. Your term will not go down in history as investor friendly.”