Are there similarities between the US economy and that of India? Bush inherited and budget surplus from Bill Clinton and chose to fritter it away on tax cuts for the rich and on an illegal war in Iraq. The Congress inherited a relatively safe economy from the BJP and then gave away 80% salary increases to useless parasitic civil servants, debt relief to farmers and compulsory rural employment to win a second term. The US is now running huge budget deficits and the Indian government is finding it impossible to keep deficit down at 4.6% of the GDP ( TOI, June 11 ). However, the US housing market has collapsed and inflation pressures are low allowing the Fed to keep interest rates low. In India property prices are still at fantasy levels feeding inflation at over 9% and the RBI will have to raise rates still further. Inflation will fall only after property prices have declined by at least 70% but that will take time. Meanwhile the combination of high inflation and interest rates means that people are spending less which will hit tax collections making it more difficult to reduce deficit. More government borrowing to fill the gap in tax collections will only push interest rates higher. That is why criminal politicians are desperate to maintain a high growth rate but with so many thieves stealing billions it will be impossible. Growth of the economy needs electricity which is pathetic. The government set a target of 78000 mw in the entire 11th five year plan period but has managed to add a meager 34462 mw while China is planning to add 100,000 mw every year for the next 5 years. A World Famous Economist / Honest Man and a bunch of criminals is not a recipe for success.