The left turn to default.

Analysts and economists have been rejecting the prospects of a double dip recession. The global equity markets led by the emerging markets have performed extra ordinarily well in the last few weeks mainly due to the change in sentiments. Stress test results of the European Banks din't turn out to be as bad as people expected. Greece has managed to raise funds and the bail out package from the European Union too should prevent the possibility of European nations defaulting. U.S Fed plans to reinvest the principal repayments into bonds, this will have a positive impact on the global liquidity.
Signs of recovery are very much visible, but the bigger question is - "How did we land in this mess?"
Let's first look at all the countries that have leading contributors to this mess.
P.I.G.S is an acronym that refers to the economies of Portugal, Italy, Greece and Spain mainly in matters relating to sovereign default. Mismanagement of funds has been the main reason behind this crisis. Let's take a look at the debt to GDP ratios of these nations.
Italy tops the list with 116%
Greece-113%
Portugal-77%
Spain-54%
Italy's debt to GDP ratio was 109% in the year 2001 and it has risen to 116% in the year 2009. Silvio Berlusconi has been the Prime Minister for a major period of time in the last decade. Despite the right of center reforms Silvio's government has failed to bring down the public debt, the fiscal deficit too has gone up due to the stimulus provided to the economy. Silvio's government has introduced many austerity measures to bring down the deficits but there has been growing protests against these measures.
The bailout package prevented Greece from defaulting. The public debt rose to such high levels due to reckless spending by the socialist governments that were in power in the last decade. Figures were fudged due to which the problem was unnoticed. Portugal and Spain have been governed by socialist governments in the last decade.
Barring Italy it can be observed that all the other three countries were governed by Socialist governments in the last decade. One of the major problems faced by the countries ruled by socialistic governments is that they fail to cap the growing public debt and fiscal deficits. Socialism mainly deals with government funding most of the social sector schemes which in turn helps in the growth in the economy, but unfortunately most of these governments end up misusing the socialistic policies to garner votes. Socialistic governments generally resort to unnecessary spending which ends up inflating the fiscal deficits and the public debt, but such schemes tend to have a positive impact on the electorate in the short term, and end up damaging the economy in the long run. Several austerity measures must be undertaken to bring down the deficits and the debts. While undertaking such austerity measures the government is forced to cut down most of its social expenditure. This causes widespread protests by the people since they have been pampered by these schemes for years together.
Looking at the past it can be observed that countries that followed socialistic policies have not been very successful and the recent crisis in Europe too suggests the same.
Indian preamble says that India is a Socialistic Republic. Gandhi family has not distanced itself from Nehruvian Socialism. It may be a cause of concern but with the economy growing at such high growth rates it should not cause any problems in the near future, but it is necessary for the literate voters in India to understand the problems the country may face due to socialism and reckless spending of the government. India's debt to GDP ratio stands at 54%. It is higher when compared to most of the emerging economies, however >8% economic growth should help us bring it down. To conclude I would say that a government following conservative policies would prevent problems caused due to excessive spendings in the long run.