Where does the money come from?

Keynesian economists conveniently ignore this question when they preach govt spending/stimulus to revive economies out of downturns. Now Warren Buffet has raised this question. Not necessarily always right (nobody can be always right), nevertheless, when Warren Buffet speaks, one must listen.

The link is
http://www.fortunewatch.com/warren-buffet-america-has-hit-the-panic-button/

We must also stop and take stock. Should India be on the path of high deficit? Mind you Krugman suggested just a few days back that in an interview suggested that the plan to balance the budget can wait till the next year. Do we want to follow his advise and reach a stage where somebody like Warren Buffet reminds us that things are no longer good?

Excerpt of Krugman's interview published in Economic Times dated 11th Aug 2009 is pasted below

What will be your advice to India as our budget balance is fairly scary, but the FM has said: I’ll worry about it later and play for the growth now?
I think that’s right. You do have to have a plan in place to restore a healthy budget but not this year. Not with the world economy still so fragile, not with so much excess capacity still out there.

Green Shoots Turning Brown

Big banks still not lending. Loan volume at the 21 largest recipients of government funding fell 7% during the month of April, according to a survey by the Treasury Department.

This is a headline from CNN Money. Surprised?

The Federal Reserve Bank of New York’s general economic index fell to minus 9.4 in June from minus 4.6 the previous month, while economists had expected the gauge to stay unchanged. Readings below zero for the index signal manufacturing is shrinking.

This one is from Bloomberg.

A little more time before all "Green Shoots" turn brown. There is no reason yet to believe that the US economy is recovering.