S&P Cuts India Outlook to Negative

http://online.wsj.com/article/SB123547596235358561.html?mod=googlenews_wsj

The government has implemented various policies that increase stress on its fiscal position ahead of the general election, which is expected to be held in May 2009," S&P Sovereign Analyst Takahira Ogawa said in a statement.
"With high government debt burden and deficits, its weak fiscal profile has been the single largest negative factor for the sovereign ratings on India," the statement said.
The federal government has ratcheted up its borrowing program four times during the current fiscal year to 3.06 trillion rupees ($62 billion) from 1.45 trillion rupees budgeted initially as it spends more to arrest a slowing economy. It plans to borrow 3.62 trillion rupees in the next fiscal year.

So the government plans on solving this problem by more debt and more borrowing and more spending. This is analogical to a person who is broke who borrows money not to start a business or pay off debts but instead to buy a new 42 inch plasma TV. This is exactly what the government is doing. Sad but true. What we need is not more stimulus but less.