Gross: Cut short-term rates to one percent

In this month's Investment Outlook Pimco's Bill Gross advises the Federal Reserve to cut rates to an even one percent and buy anything and everything in sight.

We believe that the Federal Reserve must now act as a clearing house, guaranteeing that institutional transactions clear... They must also take another bold step: outright purchases of commercial paper. They should also cut interest rates to 1%, because we are experiencing asset deflation, and the threat of headline inflation is long past.
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Future economic textbooks will likely teach that while capitalism is the most dynamic and productive system ever conceived, it is most efficient when there is a delicate balance between private incentive and government oversight.

Wow. That last part is about the dreamiest version of the future I've yet to hear during this entire credit crisis - can there be such a thing as a delicate balance between these two?