downgrade of the united states economy has raised many questions about whether or not america will continue to be the powerhouse in the global economy and now the international monetary fund predicts that china will actually outpace the united states economy by two thousand and sixteen so how is all of this going to affect the traditional players and what is the impact going to be on the so-called developing world well joining me to help get some answers on all of this is oxford educated economist and the youngest to me an advert to had a world bank department he's now the chairman of india's planning commission mr monti saying ahluwalia i want to thank you so much for joining me so first of all i want to ask you is the second wave of the global financial crisis upon us i think what will happen is markets would be disrupted slightly moderate growth prospects for the carbon in the u.s. and maybe in europe but i don't see this as going back to two thousand and eight and so where do we go from here who's going to fix what's going on in the world right now the world needs to. get together to wo

and if we listen further, he talked about the gutting of the united states economy at a time when we can least afford it respect getting rid of firefighter, not supporting infrastructure, things like that. if we get past the politics, which we've been so focused on recently, what does this bill mean for the united states economy over the next several months? >> well, nothing good. apart from the fact that we avoided default, which would have been catastrophic. if you think about maybe the three big things that you might have wanted to hope this thing would accomplish, one of them being tax reform, another being entitlement reform, and a third being and maybe the most important being something that would create the context for a revival of the american economy and some kind of a first step toward the solution of the jobs crisis, it does none of those things. so in that sense there's nothing good. i think congressman frank probably overstates the negative effects of it. it has no positive effects, and so it's a missed opportunity to the jobs and infrastructure front. it's not that bad

they are expecting the united states economy to add about 75,000 new jobs in july after two months of very slow employment growth, indeed. we'll know in just under four hours from now whether the united states has managed to add a few more jobs than it did last month. as we told you on this show earlier on, that figure has come down from 217,000 just two or three months ago. >> yeah. another thing to point out, in the last couple of months, the jobs number has disappointed massively compared with what was expected coming well under that the economy left one street-level business in new york scuffling. the shoeshiners are having a harder time than ever, but as richard roth explains, they are more than determined to keep business from walking away. >> look at your shoes. how long are you going to ignore that? >> reporter: if your shoes are scuffed, you can bet don ward will let you know. partly because the recession has roughed up the shoeshiners. >> the way the economy is now, it's fallen off bad. >> shine men like ward have adjusted their style so customers will warm to them. >> i ini

the suppose it number one economy in the united states and that's when you're looking at the physical economy physical production there on the purchasing power adjusted basis because they're renminbi is undervalued and you need to reflect that when looking at economic sizes it does seem a bit ironic though doesn't it that china is the biggest foreign buyer of u.s. treasuries so you would wonder how a country with approximately seventy percent of reserves invested in dollar assets could really benefit from the u.s. as current problems. well i didn't say they go you said that. but basically you know you have to put your money somewhere at the end of the day and what you need to understand is first of all what's the nature of the rest of that crisis projection by standard and poor's made in the year two thousand there were six years before now where they actually projected that all the major western governments were heading for junk status including france the u.s. germany and the u.k. and they started actually saying that the u.s. would lose the aaa rating staters in. two thousand and s

economy by twenty sixteen which will be the first time in more than a century that the united states economy will not be the biggest economy in the world. so what's the secret of their success. that's an excellent question yulia a lot of people say that you know china's economy focuses on exports it's obviously seen as the manufacturing hub of the world and in addition to that china has been able to create millions of jobs for their low skilled workers they've also been focusing a lot on technology which has created millions of jobs for the high skilled workers as well so they've really been able to diversify their economy they also have been focused on retaining jobs domestically and making sure that foreign investors aren't be aren't able to compete with certain domestic industries which many analysts say is something that other countries really haven't been able to figure out a jury in this financial crisis it's also important to note that china's economy is still very much state led the government controlling most of the financial sector there and you know also china's banks have been re

suppose at number one economy in the united states and that's when you're looking at the physical economy physical production there on the purchasing power adjusted basis because they're renminbi is undervalued and you need to reflect that when looking at economic sizes projection by standard and poor's made in the year two thousand and five there was six years before now where they actually projected that all of the major western governments were heading for junk status including france the u.s. germany and the u.k. and they started actually saying that the u.s. would lose the aaa rating stages in two thousand and sixteen so not actually five years ahead of that original projection now the balance sheets of these countries if anything would have only gotten worse which is why the u.s. has lost the aaa rating when you have economies major economies where the deficits and out of control and you have this kind of projections on the line that means that these countries are usually going to print have a out of the problem so you the main risk and the new form of this fund enterprises will pro

to suppose that number one economy in the united states and that's when you're looking at the physical economy physical production but on the porch is empowered just that basis because they're written in years on the value that we need to reflect i've been looking at it the moment. projection by standard and poor's made in the year two thousand and five there were six years before no red actually projected all of the major address them governments were heading for junk status including france the us germany and the u.k. and that's got it actually is is saying that they do as it would lose their aaa rating stages in two thousand and sixteen so now really. actually five years ahead of that original projection now the balance sheet of this country is if anything would have only gotten worse which is why. the us has lost the aaa rating when you have economies major economies where the deficits and they're out of control and you have this kind of projections on the line that means that these countries are usually going to print their way out of the problem so you main risk and the new form

economy by twenty sixteen which will be the first time in more than a century that the united states economy will not be the biggest economy in the world china's economy focuses on x. sports it's obviously seen as the manufacturing hub of the world and in addition to that china has been able to create millions of jobs for their low skilled workers they've also been focusing a lot on technology which has created millions of jobs for the high skilled workers as well so they've really been able to diversify their economy here in india is that people are actually quite optimistic about the way india is going to react to this global financial crisis initially we were seeing asian markets falling but people are saying that there really is only a short term impact and that in the long run that asian countries are actually better equipped they're dealing with this financial crisis india china and japan have actually been growing since two thousand and eight while obviously that's not really happening in the west significantly also you know foreign investors if they start following the path of risk a

. >> apple is the most valuable united states economy and macy's reported it's profits are up. >> the are seeing earnings is a positive but the fear, the market -- say. >> reporter: the president met with the federal reserve chairman and the treasurey secretary to try to um come up witha an economic fix. cbs news wall street. >> the new california budget took $200 million from cal fire but it forces rural home own ires to pay a special fee to make up the difference but that money comes with strings attached. cal fire can't use that money to actually fight fires. >> reporter: its notitia especially to protect rural homeowners from fire. it's why think have collecting a new tax but it's called the fire prevention fee meaning $200 million can only be spent on things like brush clearing education, not for fors and equipment. the board is now working to amend the language. cal fire could suffer deep cuts to its firefighting ability. >> one thing we will address is the fire prevention verses protection. if the intent by the governor is to move money from the department's general fund to the

economy by twenty sixteen which will be the first time in more than a century that the united states economy will not be the biggest economy in the world initially we were seeing asian markets falling but people are saying that there really is only a short term impact and that in the long run that asian countries are actually better equipped they're dealing with this financial crisis india china and japan have actually been growing since two thousand and eight while obviously that's not really happening in the last as significantly also you know foreign investors if they start following the path of risk aversion and moving away from u.s. treasury bonds many people are saying that they could start investing more in asian markets like india and china so many people over here are actually seeing all of this as an opportunity for that shift to really happen for more of the international community to get on board and move away from the dollar as the reserve currency issue some sort of basket currency that could include a lot of the asian powerhouses like japan and china. but of course we always l

the united states economy is the engine of the world and germany realizes it cannot singlehandedly pull greece, portugal, spain, italy, ireland out of the whole situation. the united states under present policy cannot pull the rest of the western economy out of the hole it is in and this is the crisis here that essentially--. >>neil: there is not enough money to go around you had to bail out everyone in jump who is in trouble and there is not enough euros in the world. >>guest: or enough dollars, we have a flat line economy and we need a president who understands things like how deeply damaging corporate tax rate is. >>neil: how does europe fowl about the -- feel about the eur? >>guest: cleated. they got the american people, they thought they always wanted who had a scandinavian view of the role of government and they realized when the united states has a scandinavian view that is hellish situation for the real scandinavia and real europe because someone has to be america. someone has to have entrepreneurial and keep it real and you have a situation where ireland and canada corporate at

first is the perception of the united states economy may be headed into a double-dip recession, the largest on earth. secondly, china, japan and europe and not growing and should not be able to pick up the slack. third and most important, what happened in europe on thursday or the day before is the the third largest economy and spain the touringth largest neither may be able to pay back their debts. on friday there was a move back up in the european central bank is mort will explain, indicating it may step in big- time. >> what about spain? >> spain is one of the problem areas, and italy is a problem area as well. italy is much further down the road in real trouble, john. they got the second largest debt per capita. i think of the major economies in europe and the world. >> eleanor. >> in started in europe and we've just caught some of the european flu. and i think when the job numbers came out friday morning, and they were better than expected as opposed to worse than expected, people felt that the 500-appoint drop didn't necessarily signal the u.s. economy was heading straight down. but w