Some Links

When I wrote my post “Most blogs are terrible”, I had intended to write a post on how to think of whether blogging will replace journalism. The idea was that we should disaggregate all the functions that current mainstream newspapers perform, and see how the same functions can be performed by the blogging network. That post has now been written, though not by me.

Ajay Shah writes that India may be in for terrible times. He has been writing that the fiscal situation of 1991 may be back. He has also been claiming that India has not yet learnt to manage business cycles.

Edmund Phelps writes about the inherent uncertainty of the capitalist sysem and points out that it is not really a problem with capitalism as such.

Hiding the Fiscal Deficit

It turns out that the UPA government, which presided over the boom phase of the business cycle has ended its term with an incredibly high fiscal deficit. It got away with its legal responsibility to keep the budget within limits by keeping them within limits on paper and simply spending more than it was allowed. Chidambaram’s response to those who pointed out that he had not actually provided funding for the NREGA was, in effect “Trust me. Do you think I am so stupid as to not provide funds for such an important scheme?” Now, we will enter the bust phase of the cycle burdened with a huge deficit. For some reason, I am reminded of the discussion I got into here.