On his first visit to the World Economic Forum in Davos, Mr Putin called the global economic crisis a “perfect storm” that had arisen from a world dominated by the US. He said that only a rebalancing of global power could cure the problem and that financial stimulus packages of the kind agreed by Washington and London could lead them down a path well-worn by Moscow while doing little to aid recovery.
“Interference of the State, the belief in the omnipotence of the State: that is a reaction to market failures,” Mr Putin said in his keynote address at the opening of the four-day meeting. “There is a temptation to expand direct interference of state in economy. In the Soviet Union that became an absolute. We paid a very dear price for that.”
A government controlled economy, where the state is the major investor as the old Soviet economic models shows, will eventually fail. Obama and the Congress should well heed the call to be very cautious in the current situation. Estimated are that should the current 1.2 trillion package fail, another 1-2 trillion might be necessary. The US Dept of Commerce, Bureau of Economic Analysis puts US Gross Domestic Products (GDP) at 14.2 trillion. That was based on the numbers thru December 2008, which showed a trend of decreases in personal income spending power, tax income to the government, etc, etc. Adding 3 trillion to the national debt which is currently 10.7 trillion means the average share of national debt for each man woman and child in the USA would increase from $35,104 to $46,313 in the next year. And would mean for the first time in history, the American economic would be in net minus...as GDP would be less than debt. This could cause a collapse in the dollar asan international currency, that many predict would leave the Chinese in a position to become the greatest economic power, with all countries posting the values against the Yuan.
Wow, I dont want to go there...
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