[GoveMoony]

NY Times: http://thecaucus.blogs.nytimes.com/2...d-leaders-say/

Austerity? Yes, say Bill Gross, a Republican, and Mohamed El-Erian, a Democrat, the chief investment officers of the giant bond fund Pimco. They support curbs on entitlement spending.

But that is for the long term. Right now, they argue, the government needs to arrest America’s dangerous economic slide. Their recipe for recovery:

1. Government must ease refinancing rules for homeowners who remain current on their payments but do not meet borrowing criteria.
2. The government needs a renewed focus on improving math, science and engineering education, as well as job retraining programs to make workers more competitive.
3. Mr. Gross says the government should finance immediate job creation to shore up the third structural weakness: America’s fraying infrastructure. Updating roads, bridges and airports would provide an engine for reducing unemployment faster.“You’ve got to create a demand for labor,” Mr. Gross said. “The private sector is not going to do it.” Even if the government must do it directly, he said, “Putting a shovel in the hands of somebody can be productive.”
4. “Credit pipes are clogged,” Mr. El-Erian said. One way to unclog them is a program of public-private partnerships, like the Infrastructure Bank that the Obama administration has proposed.
5. On the fifth problem, the government’s questionable long-term solvency, the Pimco executives say Republicans and Democrats are both right. Spending on Medicare, Medicaid and Social Security entitlements must be curbed, and taxes must go up — on the affluent and perhaps the middle class, too.
   Given the scale of the problem, Mr. Gross, the Republican, says the tax increases proposed in the “grand bargain” that Mr. Obama and Speaker John A. Boehner sought earlier this summer were too small. Instead of $1 in tax hikes for every $3 in spending cuts, he wondered, “How about one-to-one?”