“SAVING IS SIN, SPENDING IS VIRTUE”
An interesting article from Dr. Bhagwati:-

“SAVING IS SIN, SPENDING IS VIRTUE”

- Jagdish N Bhagwati

Japanese save a lot. They do not spend much. Also Japan exports far more than it imports. Has an annual trade surplus of over $100 billions. Yet Japanese economy is considered weak, even collapsing. Americans spend, save little. Also US import more than it exports. Has an annual trade deficit of over $400 billion. Yet, the American economy is considered strong and trusted to get stronger.


But where from do Americans get money to spend? They borrow from Japan , China and even India . Virtually others save for the US to spend. Global savings are mostly invested in US, in dollars. India itself keeps its foreign currency assets of over $50 billions in US securities. China has sunk over $160 billion in US securities. Japan ’s stakes in US securities is in trillions.

Result: The US has taken over $5 trillion from the world. So, as the world saves for the US , Americans spend freely. Today, to keep the US consumption going, that is for the US economy to work, other countries have to remit $180 billion every quarter, which is $2 billion a day, to the US ! Otherwise the US economy would go for a six. So will the global economy. The result will be no different if US consumers begin consuming less..

A Chinese economist asked a neat question. Who has invested more, US in China , or China in US? The US has invested in China less than half of what China has invested in US. The same is the case with India . We have invested in US over $50 billion. But the US has invested less than $20 billion in India . Why the world is after US?

The secret lies in the American spending, that they hardly save. In fact they use their credit cards to spend their future income. That the US spends is what makes it attractive to export to the US . So US imports more than what it exports year after year. The result:

The world is dependent on US consumption for its growth. By its deepening culture of consumption, the US has habituated the world to feed on US consumption. But as the US needs money to finance its consumption, the world provides the money. It’s like a shopkeeper providing the money to a customer so that the customer keeps buying from the shop. If the customer will not buy, the shop won’t have business, unless the shopkeeper funds him. The US is like the lucky customer. And the world is like the helpless shopkeeper financier. Who is America ’s biggest shopkeeper financier? Japan of course. Yet itʼs Japan which is regarded as weak. Modern economists complain that Japanese do not spend, so they do not grow. To force the Japanese to spend, the Japanese government exerted it self, reduced the savings rates, even charged the savers. Even then the Japanese did not spend (habits don’t change, even with taxes, do they?). Their traditional postal savings alone is over $1.2 trillions, about three times the Indian GDP. Thus, savings, far from being the strength of Japan , has become its pain.

Hence, what is the lesson? That is, a nation cannot grow unless the people spend, not save. Not just spend, but borrow and spend. Dr. Jagdish Bhagwati, the famous Indian-born economist in the US , told Manmohan Singh that Indians wastefully save. Ask them to spend, on imported cars and, seriously, even on cosmetics! This will put India on a growth curve. “Saving is sin, and spending is virtue.” Before you follow this neo economics, get some fools to save so that you can borrow from them and spend.

This is what US has successfully done in last few decades.

Professor Jagdish N Bhagwati
Columbia University

Department of Economics

Delhi and its killer buses have earned a reputation world over. Its become a standing joke is drawing rooms – “want to kill someone or yourself? Get into a Delhi bus ?”

And now we hear that Delhi, to solve precisely this problem, it has accepted bids from 11 players for operating 200 private carriage buses. This includes – Orix Auto, (JV between Orix a Japanese company and IL&FS) Mega Corporation, Govardhan Transport, City Life Line, Indraprastha Logistics and Starbus Services. Most of the names sound dubious barring a few.

The aim is to replace all existing Blueline buses, before 2010 Commonwealth Games scheduled to be held in Delhi. So does this mean that these new players are being put in place, only because of the Commonwealth Games and not because so many have been trounced to death under these very Blueline buses?

source

Serial bomb blasts leave 50 dead in India

India is on high alert after a series of near-simultaneous explosions killed at least 50 people and wounded 150 others in the northwestern city of Jaipur Tuesday night, government and local officials told CNN-IBN.

Bicycles were strewn about the streets near some of the blast sites, with pools of blood nearby.

There has been no claim of responsibility, but Indian government officials -- including Home Minister Shriprakash Jaiswal -- were quick to label it a terrorist attack.

The seven explosions started at about 7:30 p.m. (1400 GMT, 1000 ET) and detonated within 12 minutes of each other, police said.

The bombs exploded within about 500 meters (0.3 mile) of each other in Jaipur's old city, which is frequented by tourists.
One blast struck near Hanuman Temple, which was crowded with Hindus who worship Hanuman, the Hindu monkey god, on Tuesdays.

Another struck near a market area inside Jaipur's walled city where tourists and locals frequent restaurants and shops.

Jaipur, known as the "pink city," is about 260 kilometers (160 miles) southwest of India's capital, New Delhi.
CNN-IBN news source


Five major blasts rock Jaipur city, 6 killed
Five major blasts occurred in the crowded markets in the walled city area in Jaipur. The blasts occurred at 7:35 pm on Tuesday evening.

Six persons have reportedly died and several got injured in the blasts.

The blasts took place in Tripolia Bazar where a Hanuman temple drew a large number of devotees, Manas Chowk, Badi Choupal, Choti Choupal and Johari Bazar.

The blasts set off panic and near-stampede situation at all the five congested localities. One blast went off in a car while another at a shop. Injured have been taken to hospitals.
news source

Major blasts in Jaipur
Five serial blasts occurred in a crowded market in Jaipur. The blasts occurred in the walled city area in Jaipur.

The blasts occurred at 7:35 pm on Tuesday evening.
Times of india news source-