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David Super, a professor at Georgetown University Law School, says letting the fiscal cliff cuts in spending go into effect is fairer to the poor and middle class than the $1.2 trillion in spending cuts proposed by president Obama and the Democrats. He says the pressure of public opinion would lead to some minideals for the Bush tax cuts to go to lower incomes and for restoring some funds to defense after the fiscal cliff agreement goes into effect, leading to a fairer outcome.

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Arvind Panagriya, Prof. of Economics at Columbia University, points out the key initiatives of the Modi government in its first four years which will show results in future years for development of the country.  He mentions the Swachh Bharat Mission and cites results that show rural households with toilets are now 84% up from 38%.  By 2019 the whole country will be defecation zone free on the 100th anniversary of the birth of Mahatma Gandhi. The Dhan Jan Yojana DJY accounts opened for rural households are up to 316 million. Aadhar cards for identification are up from 650 million to 1.2 billion. The Aadhar and DJY work together to enable direct transfer of benefits to poor households, eliminating the leaks in benefits transfer and ghost accounts of the period since independence in 1947. Not mentioned by Panagriya is the Health Insurance scheme for lower income households that enable families to survive a sudden medical expense that could put them in dire straits.  These efforts work in a way to change India from the ground up from its villages and rural areas as envisioned by Mahatma Gandhi in the struggle for independence. The land acquisition law amendments were put on hold till farmers concerns could be better accomodated, an area of concern for industrial development cited in an editorial in the Hindu newspaper. Fiscal consolidation and inflation targeting have resulted in an average inflation rate of 4.3% for the 4 years of the Modi government. Inflation was over 9% in the last 2 years of the previous Congress UPA government with GDP growth dropping to 5.9% for the last two years. Average GDP growth for four years for the Modi government is 7.3%, even after the changes to implement GST taxation for one national tax eliminating state barriers in interstate commerce and demonetization to fight corruption and black money. Rate of GDP growth should be higher after the gains from the initiatives and the new GST integration of the country are felt, with increase in investment and FDI, after infrastructure improvements and land acquisition arrangements are made. Transportation infrastructure modernization initiative pushes ahead with the first bullet train in the pilot project for Ahmedabad- Mumbai set to start in 2022. This is a $17 billion project financed for $13 billion by the Japanese government at 0.1% loan for 50 years, moratorium on repayments for 20 years, using E5 Shinkansen series technology. Implementation of this project on a sound financial basis should lead to transformation of the Indian rail network, raising the level of technology implementation across the entire Indian rail system. Such an achievement would rival the first introduction of railways into India in the nineteenth century under the British. A new bankruptcy law is intended to free up capital for investment by putting behind the large number of non performing loans in the Indian banking system. Changes made by the central bank RBI are designed to speed up this process so that loss making enterprises are absorbed, consolidated or shut down, a legacy from the earlier period.     ...

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The employment to population ratio in August 2011 was 58.2%, down from 62.7% in December 2007, according to the Labor Department. For men the ratio is 63.6%, down from 69.4% in 2007 when the recession began. About one percentage point of this is a result of a surge of retirements during this recession period.

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In this interview with Gerald Seib of the WSJ, U.S. president Obama responds to criticism within his party as he pushes for the Trans Pacific Partnership free trade agreement with Japan and other countries in Latin America and Asia. European nations and India have joined the Asian Infrastructure Investment Bank setup by China, creating pressure for the U.S. to respond to China's influence in the region. The interview shows president Obama taking the criticism from inside the Democratic party personally about his lack of concern for middle class and working class families during his six and half years in office.

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President Obama's proposal on Dec. 17, 2012, in the fiscal cliff negotiations sets the figure at which Bush era tax cuts are permandently extended at $400,000 instead of the $250,000 in earlier proposals. Speaker Boehner's Republican proposal was for a figure of $1 million. The $400,000 proposal would mean that the top tax bracket of 35% would increase to 39.6%. Currently the tax rate increases to 35% from 33% at the cutoff point of $388,500. The White House plan now cuts spending by $1.22 trillion over 10 years. $800 billion comes from cuts to programs, with half of these cuts in federal health care programs, $200 billion in programs like farm price supports, $100 billion in military spending, and $100 billion in other domestic programs over which Congress has control. The White House proposal also supports additional spending on infrastructure, extension of expiring unemployment benefits, protection of "vulnerable populations" such as the disabled and wounded veterans on Supplemental Social Security benefits in inflation calculations, and permanently stop expansion of the alternative minimum tax affecting the middle class. On business investment the president's proposal would make permanent the credit for corporate research and development....

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Even though E-Bay executive Meg Whitman has outspent Jerry Brown by $130 million, much of it her own money, she trails Brown by 8 percentage points in an Oct 20 survey by nonpartisan Public Policy Institute of California. That survey showed Brown leading 44% to 36%. She had a hard line stance on illegal immigration in her ads for the primaries, which changed later in the campaign to attract Latino voters. Her campaign crafted by consultants focussed on three themes- cut government spending, create jobs, and fix education. Brown is a former Governor of the state and current attorney general. Experts attribute the lagging Whitman campaign to voters leery of 2 kinds of politicians- the first is the career politician and the second is longtime corporate executives. In other polls Senator Barbara Boxer is leading Ms Fiorina, former HP executive, 43% to 38%. Because of last minute surges in the polls, a lead of 8 points or more is considered necessary for the governor's campaign, for a candidate to win. Another factor is that Governor Schwarznegger came in with no political experience, and was beset by the state's fiscal troubles, with his poll ratings now at 28%....

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U.S. Federal Reserve chairwoman, Janet Yellen, says the Fed's promise to be "patient" before raising interest rates means it will hold off for 2 months to check economic conditions before taking action. This would put the decision off till June 2015. The Fed will look at a range of factors including inflation, says Yellen. Yellen's comments to the Senate Banking Committee on Feb. 24, 2015 were- "I don't want to set down any single criterion that's necessary for rate increases to occur. We will be considering a range of evidence that pertains to the inflation outlook." In testimony Yellen said she wanted to be "reasonably confident" that inflation will return to 2% before raising rates. The Fed's measure of inflation, Commerce Department's personal consumption expenditures price index is below the 2% inflation target of the Fed for 52 of the past 68 months, and for 34 consecutive months.

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The FDIC acknowledges that it has not been able to get banks interested in a pilot program called the Legacy Loans Program. That program was designed to give the banks an opportunity to sell off $1 billion of troubled mortgages. Since November with the efforts of the Troubled Asset Program under Secretary Paulson to have the banks sell off these assets in an auction or some other way, the whole issue of getting the toxic or troubled assets off the books of the banks has been effectively shelved. The Obama administration's version of this was the Geithner Public Private Partnership program, but this like Paulson's TARP never really got off the ground. Instead several things have happened that have enabled banks to show higher profits and improve stock prices. The period from March 2009 to June 2009, a period of several months has seen bank stock prices recover and banks are now able to raise capital on their own from investors. The government's "stress tests" gave the banks credibility with investors and they were designed not to be so stringent as to affect confidence. The mark to market rule has also been relaxed so that banks are no longer required to show these toxic assets at prices that reflect large losses. Bank executives also are wary of the new executive compensation rules of the government. All of these things have combined to create asituation where some confidence has been restored, but at the same time experts are pointing out that the underlying problems of an estimated $1 trillion in troubled assets remains. Banks are even less likely to want to part with these assets at lower prices now that some semblence of confidence is returning, as they would then have to show large losses. What this implies is that if the economy suffered a setback, these problems would return and be just as intractable as ever....

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Difficulties facing China from an overheating economy, a property bubble in many cities,, and a 22.5% jump in March in the broadest measure of money supply being the latest signs of trouble. The government announcement will show the economy growth at 12% rate in the 1st quarter of 2010 vs. 8.7% in 2009. The problem is that China may have acted too aggressively when the central bank increased money supply and state-owned banks in China's centralized banking system were ordered to jack up the lending. The $586 billion stimulus sent even more money to construction and energy companies. Without effective steps and fast the Chinese economy could run into serious problems.

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The Bank of Mexico, Mexico's central bank, cuts interest rates by half a percentage point to 3% in June 2014. The consumer price index is at 3.4% for 12 months through mid-May, and the central bank sees the inflation target of 3% by early 2015 as achievable. The central bank's estimate for GDP growth in 2014 was lowered to 2.8% from 3.5%. GDP growth was annualized 1.1% for the 1st quarter of 2014. Mexico has failed to live up to the growth expectations after the new Nieto administration's efforts to jumpstart the economy and opening up of the state oil industry to foreign investment. The policy changes of the Nieto administration set the future course of the economy and will take time to deliver results in economic growth. More effective administration and execution is needed for economic growth.

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In nominal terms China's currency, the yuan, appreciated by 3.7% in 2011. The real effective exchange rate, measured on a trade weighted basis and adjusted for relative consumer prices is the more significant rate. The real rate shows the yuan up by 5.3% in 2011, according to the Bank for International Settlements. In November 2011 the yuan appeared to be weakening, and China's prime minister, Wen Jiabao, says China wants to see the renminbi more flexible "in either direction."

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The Economist cites estimates from the Bank of England showing Britain's national output peaking at 1.5 trillion pounds in 2007 and not likely to return to that level till 2015. It points to fears of a lost decade. Meanwhile debt is rising from 600 billion pounds in 2008 to 1.1 trillion in 2012, making reducing the debt to GDP ratio by 2017 even more difficult. Lower growth affects tax revenues even as social benefit costs increase. Part of the problem is that from 2009-2010 to 2011-2012 public sector net investment declined from 48.5 billion pounds to 28 billion pounds. The Economist suggests Chancellor Osborne take up an additional investment in infrastructure of 28 billion pounds, even borrowing 14 billion pounds in the bond markets if needed, as a prudent step to revive growth. Small improvements in rail, roads and bridges could make up for a lack of large projects. Other suggestions include expanding the "funding for lending" scheme with banks to get capital to small business, finding more savings in the National Health Service, and changing the way Britain taxes development land that remains undeveloped. Britain, now joins, Portugal, Spain, France and Italy, in the failure of austerity measures alone creating a return to economic growth and lower deficits. In 2013 improving competitiveness and boosting economic growth become critical following years of austerity measures....

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Raising the minimum wage makes sense because it is low and has not caught up with inflation. In real terms it is lower today than in the 1960's, even though productivity has doubled, which is why it makes sense. Economic sudies show that it is not likely to reduce jobs.

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Weymouth interviews Colombian President, Juan Manuel Santos. Santos was finance minister, foreign trade minister, and defense minister under former president Alvaro Uribe. The U.S. is negotiating a free trade agreement with Colombia. Santos has improved relations with neighboring Venezuela, which under Uribe were strained upto the breaking point. He is also improving relations with Ecuador, and working to strengthen the Andean Development Council. Santos says Colombia has a smaller drug problem after defeating the major cartels, though mini-cartels still operate in the country. On fiscal responsibility Colombia has introduced a rule in the constitution to limit deficits to 1% of GDP. Santos expects 5% growth in 2011. He hopes to protect Colombia's growth in a global financial crisis by strengthening regional reserve funds, multilateral cooperation of Andean countries, and central bank monetary policies. Santos plans to abolish the DAS intelligence agency in 3-4 months. He plans to create a new intelligence agency and transfer functions such as immigration that were under DAS to other agencies. He has also launched investigations and action against corruption in the government and against public officials working with local mafias. To do this he is working with the attorney general, prosecutor general, the controller general, and police. This has led to criticism from Uribe who sees the changes in policy pointing to deficiencies in the Uribe administration. Colombia is a country with a population of 46 million and plays a significant role in the northern part of Latin America. Santos assumed office in 2010 and was the choice of Alvaro Uribe. His policies have won him a 71% approval rating....