Obama for cost cuts to guard US against India, China challenge

Faced with over $1 trillion fiscal deficit, US president Barack Obama has said Americans need to reduce expenditure and cut costs, or else India and China will outperform them.

Pointing out that there are no easy solutions for the recession-hit US economy, Obama said at a White House press conference on Tuesday, "It will take many months and many different solutions to lead us out (of recession)... There are no quick fixes and there are no silver bullets".

Obama said his administration inherited a whopping fiscal deficit of $1.3 trillion from his predecessor. While it would take a long time to fix the structural deficit, US must bend the curve on these wide fiscal gaps, he added. 

Otherwise, Obama warned, "... we will allow China or India or other countries to lap our young people in terms of their performance. We will settle on lower growth rates, and we will continue to contract both as an economy and our ability to provide a better life for our kids".

On China's concern over the value of the US dollar as a global currency, he said, "... the dollar is extra-ordinarily strong right now... because investors consider the United States the strongest economy in the world, with the most stable political system in the world.

"I don't believe that there is a need for global currency". 

On his expectations from the forthcoming meeting of the leaders of the 20 developed and developing countries in London, Obama said the US would not like a situation in which some nations make extraordinary efforts while others don't to lift the global economy from the financial morass. 

The US president, who himself has voiced concern over American companies shipping out jobs overseas, said the G-20 summit has the goal to create employment and get the world economy moving by avoiding protectionism.

"Let's avoid steps that could result in protectionism, that would further contract global trade," he said.