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David Stockman, Director of the Office of Management and Budget under President Reagan tells Tom Keene that the first step to deficit reduction is to means test the 2 milllion to 5 million or 10 million people who are very affluent, and have the benefits of some part of this population eliminated entirely. The next step he suggests is for spending much less on defense. A defense budget at $800 billion he says does not make sense today, because it is 35% larger in real terms than the budget when Reagan was President and the U.S. faced the Soviet Union. The U.S. does not need to be the world's policeman.

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Speaking at the Economc Club of Indiana, U.S. Federal Reserve chairman Bernanke, says responsibility for fiscal policy lies fully on Congress and the administration. Monetary easing through QE I,II and III, which reduces the borrowing costs of the U.S. government by keeping interest rates low, cannot be seen as taking pressure off Congress and the administration, as critics claim. He countered criticism by saying: "Suppose notwithstanding our legal mandate, the Federal Reserve were to raise interest rates for the purpose of making it more expensive for the government to borrow. Such an action would substantially increase the deficit, not only because of higher interest rates, but also because the weaker recovery that would result from premature monetary tightening would further widen the gap between spening and revenues." Lawmakers would be no more inclined to come up with a program to reduce the deficit in this situation argues Bernanke. This statement of Bernake only reaffirms that low interest rates are an important goal here in the U.S.,- just as they are for France and other countries in Europe that are faced with tackling large debt and deficits- and are part of the overall solution for the government to manage its finances....

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The IMF in its 2012-2013 Global Economic Outlook Report presented at its annual meeting in October 2012 estimates global economic growth of 3.3% in 2012 and 3.6% in 2013. This is a drop of 0.2% for 2012 and 0.3% for 2013 from its earlier forecast in July 2012. Under the IMF definition the global economy GDP does not have to decline for a recession. Advanced economies growth estimate is 1.3% in 2012 and 1.5% in 2013. Emerging market economies growth estimate is of 5.3% in 2012 and improving to 5.6% in 2013. Specifically for the eurozone growth estimate is decline of 0.4% in 2012 and 0.2% growth in 2013. U.S. growth is estimated at 2.2% for 2012. China's growth rate is estimated at 7.8% in 2012 with a growth uptick to 8.2% in 2013 as a much smaller stimulus than the one in 2009 kicks in. This will help commodity exporters like Brazil, Australia, and Canada. Two surprises are Brazil's growth with a significant improvement to 4% in 2013 from 1.5% in 2012 because of sharp interest rate cuts and improving demand from China. The other is India which is expected to show a significant slowdown with a growth estimate of 4.9% as the government faces what the Kelkar committee report calls "a perfect storm" of a large current account deficit and a budget deficit, and failure to attract foreign investment. Growth in Japan is expected to slow to 1.2% in 2013 from 2.2% in 2012 as the government imposes a sales tax increase to reduce its deficit. ...

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Former Russian finance minister, Alexei Kudrin, tells a news confrence at the St. Petersburg Economic Forum, that Russia should brace itself for an extended period when oil prices drop from $90 in June to $60. Russian finances are based on oil prices at $117 per barrel. He cautioned against the high military and social spending planned by the Putin administration.

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A documentary that will be shown on HBO in fall 2016 was screened at the Tribeca Film Festival in April 2015. It shows the disagreements between Holbrooke, who negotiated the Bosnia accords that ended the war there, and president Obama.

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Factors making Russia different from other emerging markets are the foreign exchange reserves of $497 billion. From mid 2009 to the end of 2012 portfolio inflows were only 1% of GDP, according to Morgan Stanley. Problems in Russia include growth slowing to 1.5% and higher inflation with reliance on oil revenues. Russia is still dependent on oil and gas revenues and has not diversified the economy. Foreign investment is limited.

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Speaker Boehner's difficulties getting Republican votes in the U.S. House of Representatives. 151 Congressmen and majority leader Cantor voted against the McConnell-Biden fiscal cliff agreement of Jan. 1, 2013.

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Polls show 83% of the German public support increasing the minimum wage to 8.50 euros an hour. About two thirds of the public support increasing income taxes on high wage earners. The Social Democrats talks with the CDU to form a coalition are likely to lead to CDU accepance of the condition for a minimum wage of 8.50 euros an hour, but not to the condition for raising the taxes on high income earners. The SPD sees the higher taxes as a way to pay for new infrastructure. A survey done for TV broadcaster ZDF shows 61% of Germans favoring a SPD-CDU coalition. In the 2013 elections the SPD gained 25.7% of the vote and the CDU-CSU gained 41.5%. The SPD is pushing for flexible retirement age, equal pay for men and women, a tighter financial regulation, and a growth and employment strategy in the EU.

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The team of 5 engineers decided they would produce the first Vande Bharat train in 18 months- Project 18. The Indian Express talks to the team of original engineers who were on Project 18.  They are all part of Chennai Integral Coach Factory, setup with Swiss collaboration in 1955. By 2019 the first train was operational at speeds of 180 km per hour, semi-high speed and setting the transition to high speed trains developed entirely within India. Sudanshu Mani, General Manager of ICF, headed this effort and set the target of 18 months. He says China used to import all its trains and one day just decided to make its own- he asked himself the same question, why don't we make our own? Mani was in Berlin for 3 years on an earlier collaboration for train technology in the 1980's. By the 1990's this technology was 20 years old he says. That's how long it took to get anything done in those days, by the time it got started the technology would be obsolete. By 2018 just 2 years before retirement Sudanshu set up the Project 18 team convinced that this was the only way to get it done- to beat the odds. Devi Prasad Dash heads electrical engineering. Srinivas heads mechanical engineering. Pradhan is Chief Design Engineer. They did everything from scratch. There are 5000 others who worked on the project. Dash says it was like T20 cricket, just that they decided to do it in 18 overs. Ever wonder why the train is all white and with blue stripe? Subranshu who was chief mechanical engineer at the time says they tried other colors. Manish Pradhan says they decided on white after one thought that Indian trains are never white because we had that belief that anything white would get dirty faster. That is when we decided to make it all white and it will not look dirty, he says. Sudanshu Mani says he would close his eyes and he would see always the old Indian trains that one would see from the 1960's from Ahmedabad to Rameswaram, and onto Colombo after the ferry. At that time Colombo had Canadian coaches and locomotives under a Canadian aid plan from Talaimannar to Colombo which were like American trains, looked miles into the future.The same thing must have happened to Chinese engineers because Chinese premier Chou-en-lai visited the ICF in Chennai in the 1950's and wrote that Chinese engineers could learn about the new Swiss technologies from ICF Chennai. That is when the Swiss were building their own trains with European technology of that time. China and India, and Japan had no idea about the high speed trains that were in the future. This is how technology advances. This is how people build better lives and how the aspirations and hopes of younger generations become a reality. Somewhere in the dim light of the past there is a Chinese engineer with the undaunted courage, concentration and determination to "Just Do It," and before that a Japanese engineer, and before that a Swiss engineer designing a train for the Swiss Alps, a Canadian or American engineer designing newer trains for the Prairies all the way to British Columbia and California. All dreaming Big and executing Well, with the resources of each country there to aid them each step of the way. ...

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The Peronist candidate Alberto Fernandez wins Argentina's election with 48% support. Mr. Macri's economic policy led to mismanagement of the economy, and recession, high inflation. Mr. Macri took on $100 billion in foreign debt and had to turn to the IMF for a $57 billion bailout. The shift in administration happens as the peso tumbles. By lifting capital controls in 2016 when the official rate was 10 to the dollar Mr. Macri shifted direction but failed to manage this in a prudent way leading to a jump in the foreign debt. By the second half of 2018 this policy led to the peso falling to 45 to the dollar and another drop by mid 2019 to about 60 to the dollar. The central bank has burned about $22 billion or a third of the central bank reserves to defend the peso, including $4 billion only last week. A third of this decline in reserves is due to withdrawals as capital controls were reimposed., the remainder due to interest on debt and bank interventions in currency markets to defend the peso. Customers are now limited to $100 in withdrawals leading to demand in the black market pushing the rate to 75 pesos to the dollar. Argentina is no stranger to these crises, yet they repeat every 10-15 years. The earlier Peronist administration of Mr. Nestor Kirchner came in when there was economic collapse in 2003 and had to suspend debt payments as a last resort. Negotiations were begun with lenders only after 2007 when Mr. Kirchner's wife Christina Kirchner assumed office. She won the election in 2011 but was defeated in the 2015 election by Mr. Macri, and reelected in 2019 as vice president running under her former chief of staff Mr. Alberto Fernandez. The Peronists are a socialist party and restored a degree of stability to the economy, limiting foreign debt and managing the economy with a rebound in commodity prices such as soyabeans exported by Argentina to meet growing demand in China. By 2015 the country appeared ready for a change, but Mr. Macri's austerity policies and mismanagement of the debt led to a repeat of earlier crises with high inflation and collapsing peso, hitting working class Argentines.    Argentina has a long history of alienation with IMF loans with policy strings attached for austerity spending, starting in 1957.  About 58% of the people who voted Macri into office opposed turning to the IMF in May 2018 after interest rates were raised to 40% by the central bank to stem a drop in the peso. The IMF loan this time was a shorter duration loan on better and was supposed to help Mr. Macri stabilize the economy and its cash and payments position. The jump in foreign debt including issue of dollar denominated bonds, lack of caution and prudence in managing the finances, lack of currency controls, drop in foreign investment by 2019, and the fall in commodity prices from the commodity boom years especially soyabeans, combined to create another collapse in Argentina. It was thought that the 2003 crisis that hit the working class and poor hardest was behind it once and for all. Yet only 15 years later the country is in a similar mess and hardships, showing that prudent management of finances, maintaining social programs to support the middle and weaker segments, and ways to create sustainable growth from within, are still the major problems facing not just Argentina, but also Brazil, Chile and other nations of Latin America.   ...

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Janet Yellen, Fed chairwoman, says the financial system is safer now after the financial regulation, stress testing, living wills and other changes that the Federal Reserve has implemented. She says there is no need for a reduction in these key regulatory rules. One of the changes is that banks now use a safer mix of financing- equity financing has doubled for capital, and wholesale borrowing is cut in half, since the 2008 financial crisis that took the U.S. and with it the global financial system to the brink of disaster. The appointment of Randall Quarles to the Fed by the Trump administration was intended to  reduce regulation, and this is Yellen's response to such proposed ideas.