Highlights:
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...
"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."
...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.
and in case you wondered like I did:
stul·ti·fy /ˈstʌltəˌfaɪ/ [stuhl-tuh-fahy]
–verb (used with object), -fied, -fy·ing.
1. to make, or cause to appear, foolish or ridiculous.
2. to render absurdly or wholly futile or ineffectual, especially by degrading or frustrating means: Menial work can stultify the mind.
3. to allege or prove (oneself or another) to be of unsound mind.
UPDATE: I was able to find the full article written by Gross over the weekend and he even advocates an Employer of Last Resort program (ELR), something that I believe meets the demand made by Catholic Social Teaching that the State work to provide access to steady employment for everyone.
From Gross:
In the end, I hearken back to revered economist Hyman Minsky – a modern-day economic godfather who predicted the subprime crisis. “Big Government,” he wrote, should become the “employer of last resort” in a crisis, offering a job to anyone who wants one – for health care, street cleaning, or slum renovation. FDR had a program for it – the CCC, Civilian Conservation Corps, and Barack Obama can do the same. Economist David Rosenberg of Gluskin Sheff sums up my feelings rather well. “I’d have a shovel in the hands of the long-term unemployed from 8am to noon, and from 1pm to 5pm I’d have them studying algebra, physics, and geometry.” Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.
To be clear, I don't necessarily agree with everything he says, but I do think he brings up good points to consider and I am in favor of an ELR program.
From CST:
Among the several purposes of a society, one should be to try to arrange for a continuous supply of work at all times and seasons; as well as to create a fund out of which the members may be effectually helped in their needs, not only in the cases of accident, but also in sickness, old age, and distress. -- Rerum Novarum, pp.58
(Note: This was written before most western societies adopted any kind of welfare program)
But another point, scarcely less important, and especially vital in our times, must not be overlooked: namely, that the opportunity to work be provided to those who are able and willing to work...and this same social justice demands that wages and salaries be so managed, through agreement of plans and wills, in so far as can be done, as to offer to the greatest possible number the opportunity of getting work and obtaining suitable means of livelihood. -- Quadragesimo Anno, pp.74
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