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In a letter to clients, PIMCO's Bill Gross called for more job-creating stimulus spending, calling the current emphasis on deficits by both parties “a recipe for disaster.” Judging from recent stories about Gross -- especially his warning that the U.S. is, on balance, in even worse financial shape than Greece -- fewer are paying attention to his focus on the solution than the problem.

Thus the first sites to jump on Gross' letter were liberals like TPM and Firedoglake. Most business sites I read were more interested in S&P's warning of a possible downgrade unless the deficit is dealt with now.

What Gross is saying, however, shouldn't be considered merely liberal political quackery. Businesses can sometimes sell assets to pay off debts, but in general you grow your way out of debt. I know, government has a bad habit of borrowing money for wars and tax cuts -- the private sector is the big job creator -- but one way to create private sector jobs is to place orders for stuff, and that's what Gross wants the government to do.

Gross' vehicle for this is an “infrastructure bank,” a fund of borrowing dedicated to rebuilding the roads, bridges and other big projects America has traditionally used to create abundance and get goods to market. Gross is also calling here for a more rational trade policy, like Warren Buffett's idea of “import credits.”

At some point it's obvious inflation will force China to raise its currency's value, which will have the net effect of reducing what we owe it, and lowering the price of our exports to it. But until it does, we need to focus on jobs, jobs, jobs, Gross writes, sounding a lot more like Rachel Maddow than Bill O'Reilly. Or Barack Obama, for that matter.

A thriving business will grow its way out of debt. Bankers know you only push failing businesses toward bankruptcy. Yet that's the course politicians on both sides in Washington are advocating now, Gross writes.

Some in the business media agree with Gross: Mark Gongloff of The Wall Street Journal and Murray Coleman of Barrons. Bloomberg Business Week also covered the story.

But as long as Gross' view remains a minority one, expect Uncle Sam to continue treating himself as a deadbeat. And remaining one, too.

Source: Considering Bill Gross's Demand for Immediate Stimulus