Posted Friday, March 2, 2012, at 11:38 AM
Amid a sour mood about the past decade's worth of economic life in the United States, it's worth taking a minute to consider that we now live in a world where 6.1 percent GDP growth in India is considered a huge disappointment, when in the '50s, '60s, '70s, and '80s India's growth averaged just 3.5 percent annually. We're living, in other words, through a period of tremendous progress for a huge share of the world's poorest people. Even in the very bleak portrait of Mumbai slum life that you'll find in Katherine Boo's* justly celebrated new book you're looking at a country where basically all the characters are better-educated than their parents. Meanwhile, the country has just no for the first time been officially certified as free of polio, a tremendous achievement for real human welfare.
Incidentally, India would be a great place for all of America's deficit hawks to go and hang out for a while. India is actually in the situation that many people seem to want to believe that the United States is in. The central bank could easily cut interest rates aggressively to boost economic growth, but it's reluctant to do so because the baseline inflation rate is fairly high and the government's budget deficit is big. Fiscal consolidation would lay the groundwork for monetary stimulus, and the "expansionary austerity" of debt scolds' dreams would very likely come to pass, with increased investment boosting both short-term economic activity and medium-term productivity growth. Absolutely none of this is true of the United States, but well over a billion people live in India so it's not as if people with a characterological predisposition to want to talk about budget deficits can't put themselves to some use.
Correction, March 2, 2012: This post originally misspelled Katherine Boo's surname. (Return to the corrected sentence.)