Pimco Founder: A Balanced Budget will not produce a balanced economy.

Great op-ed piece in The Washington Post by Bill Gross, founder and co-CIO of the investment management firm Pimco. The whole quote is:

"...an anti-Keynesian, budget-balancing immediacy imparts a constrictive noose around whatever demand remains alive and kicking. Washington hassles over debt ceilings instead of job creation in the mistaken belief that a balanced budget will produce a balanced economy. It will not."

Mr. Gross also makes the following astute observation:

"But while our debt crisis is real and promises to grow to Frankenstein proportions in future years, debt is not the disease — it is a symptom. Lack of aggregate demand or, to put it simply, insufficient consumption and investment is the disease. Debt has been simply an abused sovereign and private market antidote to sustain it. We and our global market competitors are and have been experiencing a lack of aggregate demand for several decades. It is now only visibly coming to a head, as the magic elixir of leverage is drained and exhausted."

This is a must-read article!