Turning around on a dime, well 50 billion of them

India used to be a socialist, state-managed economy until it couldn't anymore. What made the system unsustainable was government debt, but the amount involved shocked me:

Singh told the prime minister that the country immediately needed a huge standby loan of at least $5 billion. To manage the current financial year would only require $2 billion, he suggested, but it would be prudent to take a larger loan from the IMF in anticipation of ongoing problems in the following year

So the reason for India's economic miracle was the need for a $5 billion loan. Manmohan Singh (then the finance minister and now the prime minister) liberalized the economy in order to convince the World Bank to lend India the money. Liberalization motivated private entrepreneurs who swept in, and the rest is history.


How small is $5 billion in the context of governments? Germany essentially loaned $600 billion to Greece, and that was just today. This is widely believed to be not enough.  Obama's first stimulus, the one that kept the US out of depression territory, was $800 billion.


It amazes me that India turned around on $5 billion.