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Pretty much expected from Putin, although not completely unfair. We'll be paying for it sooner or later though, and probably sooner.
Prime Minister Putin views the world in almost neo-mercantilistic terms. Hence, he sees chronic negative imbalances as generally unhealthy. Moreover, given the size of the U.S. imbalances, he recognizes that they have global implications. He is not completely off the mark, even if he engages in hyperbole that detracts from a more realistic point. The large capital inflows that are required to finance the United States' enormous and persistent current account and fiscal deficits entail opportunity costs. In part, PM Putin's outlook was influenced by the difficult post-Soviet transition that took place in Russia. More than likely, he believes the U.S. is avoiding taking the painful measures to restructure its economy and government finances, something over which Russia had no choice when it plunged into its crisis.
And Russia had a choice when it defaulted, and chose to screw over its creditors despite knowing of the massive amounts of wealth it was sitting over.
Иосиф Сталин;1059706009 said:It's difficult to think in the same terms than Vladimir Putin if you have been in the US all your life, but he's absolutely right. The world doesn't need the US.
I probably wasn't sufficiently clear. Russia likely had a choice as to whether it defaulted (it chose default). Russia had no choice when it came to the onset of its crisis. In contrast, if U.S. policy makers choose wisely, the U.S. still has enormous latitude to avoid the kind of crisis that unfolded in Russia. But will the U.S. choose wisely remains to be seen. Risks of a less than prudent course likely have increased on account of the recent political dysfunctionality exhibited during the debt ceiling debate. That a modest deficit reduction agreement was sealed to avoid a self-inflicted crisis does not mean that U.S. political risk has diminished.
Also, I fully agree about PM Putin's motives. He is extremely focused on Russia's interests how he perceives them and those interests alone. The less exaggerated point about the opportunity costs associated with large capital inflows is a reasonable one. PM Putin's exaggerated claim goes well beyond that narrower issue.
If Russia wasn't sitting on a pool of oil and gas it would be completely bankrupt. Where did Putin earn is degree in economics?
I agree with Putin... we arn't only parasites in the global economy but also on our own.
Of course, not every country with abundant natural resources is prosperous. Yemen is but one example. Factor endowments offer potential, but that potential needs to be realized.
Of course, not every country with abundant natural resources is prosperous. Yemen is but one example. Factor endowments offer potential, but that potential needs to be realized.
There is no "we." The US government and American people are two separate entities.
Don't degrade yourself by identifying w/uncle sam.
Yemen's natural resources are in serious decline.
Yemen still has abundant natural resources (3 billion barrels of proved oil reserves and 16.9 trillion cubic feet of natural gas) with a total value of near $500 billion. Having said that, natural resources are a starting point. Any advanced economy has to transition into a broader range of activities if growth is to be sustained for the long-term. Russia and Yemen are no different in that respect.
However, Russia has done far more than Yemen to leverage its natural resources. In other words, it has taken measures to realize the potential that exists with respect to its natural resources. Yemen has not. Therefore, it isn't Russia's natural resources that have made the big difference, it is what Russia has done to leverage those resources. Had Russia not leveraged those resources, it would be far worse off than it presently is. For the longer-term Russia still has a lot of work to do to diversify its economy.
I probably wasn't sufficiently clear. Russia likely had a choice as to whether it defaulted (it chose default). Russia had no choice when it came to the onset of its crisis.
In contrast, if U.S. policy makers choose wisely, the U.S. still has enormous latitude to avoid the kind of crisis that unfolded in Russia. But will the U.S. choose wisely remains to be seen. Risks of a less than prudent course likely have increased on account of the recent political dysfunctionality exhibited during the debt ceiling debate. That a modest deficit reduction agreement was sealed to avoid a self-inflicted crisis does not mean that U.S. political risk has diminished.
The fact that our politicians have managed to convince you of this is representative of what our fundamental problem is.
No, we aren't two separate entities.
LAKE SELIGER, Russia, Aug 1 (Reuters) - Russian Prime Minister Vladimir Putin accused the United States on Monday of living beyond its means "like a parasite" on the global economy and said dollar dominance was a threat to the financial markets.