Say W-h-a-a-a-t?

Below are some of the wildest,boldest, and most surprising stories we ran across this week. Thanks toall who shared their favorites.  Keep them coming! This is a weeklyseries, so we’ll be back with more next Friday.

The following quote comes to us from famed economist Oliver Blanchard, IFM chief economist, Tuesday, September 20, 2011.  He said:  “What is needed to sustain growth is that households and firms increase their demand as fiscal deficits are being rolled back,” said Oliver Blanchard, IMF chief economist, on Tuesday. “What we observe is that this is not going well.”

Sarah Palin — yes,the momma grizzly herself — makes some shockingly insightful remarks about crony capitalism and the dangers of mixing money and politics.  “This is not the capitalism of free men and freemarkets, of innovation and hard work and ethics, of sacrifice and of risk,” shesaid of the crony variety. She added: “It’s the collusion of big government andbig business and big finance to the detriment of all the rest — to the littleguys.”

The former Democraticgovernor of Michigan played the austerity game.  Now she admits that herpolicies just made matters worse — and only the federal government can turn thetide.  “Everything that is hitting the country hit Michigan first,”Ms. Granholm said in an interview, reflecting on eight years in office in whichthe state’s economic crisis overshadowed all else. Her response to the crisis,she said, was to cut spending, cut government jobs, cut taxes – the veryapproach now being promoted elsewhere, particularly after Republican victoriesin statehouses around the country in 2010.  

“We tried all of those prescriptions,too,” said Ms. Granholm, whose final term ended with the start of thisyear. “We did everything that people would want us to do, and yet itdidn’t work.”  “I think thereare ways to stop it but it can only happen with a partnership with the federalgovernment, because individual states simply do not have the tools to competeagainst China or the globe.”

In a piece published on Monday, September 19, 2011,  Dean Baker lent some credence to Rick Perry’s insane argument about Social Security:  “The way in which Social Security is ostensibly similar to a Ponzi scheme is that it depends on new workers in the future to meet obligations that it incurs today. This also happens to be true of any debt issued by either the government or the private sector.”

Two guys walk into abar.  The other one — a corpse — gets dragged in by his mates.  Story here.

9 responses to “Say W-h-a-a-a-t?

  1. Could I please nominate anything and everything that George Osborne says, ever? Just google "the Chancellor, George Osborne, said", and you should pretty much be able to post whatever comes up.

  2. "The former Democratic governor of Michigan played the austerity game."The state of Michigan is a currency user required by law to balance its budget. Was there another option?

  3. Of course, but governors didn't push the White House nearly hard enough. I wrote a post about this before the Republicans took over. The governors should have stormed the White House with cameras rolling and spelled out in no uncertain terms the severity of the jobs crisis and the ramifications of the federal government refusing to provide aid. It may or may not have worked, but it would have forced a spotlight on the issue.

  4. I imagine Michigan could have started a state bank so that the interest on loans to themselves, backed by state assets, would be returned to the state, as well as interest from other loans such as student loans, etc.

  5. I think Dean Baker deserves to be treated somewhat more generously. A probably accurate interpretation is that he is saying the sole point of resemblance between Ponzi schemes & SS is that they both involve money=credit=debt, which is always a promise incurred now depending on future actions for its fulfillment. So he can be criticized for making a criticism his audience might not understand, but not for being wrong, or lending credence to Rick Perry here.The truly problematic sentence is the next one "If the size of the working population in the United States collapsed tomorrow, then it would not have the tax revenue to pay off government bonds."Of course this is gibberish, the way it is stated, in nominal terms, and can only be ascribed sense if one translates it into real terms.

  6. Payroll is a complex business and that is precisely the reason why many small businesses and organizations prefer to outsource their payroll to a specialist payroll company.Payroll

  7. It seems to me that public deficits did not increase household savings in countries that did not balance the budget. You can not seriously say that Ireland or Greece balanced their budgets?Do not be so hard on Blanchard.

  8. Dean Baker sez:The reality is that there is no realistic basis for the comparison between Social Security and a Ponzi scheme. The proper response to Governor Perry's charge should have been to ask whether he had any understanding at all about the country's most important social program. He had committed a gaffe of monumental proportions. The media should have focused on exposing the governor's ignorance, not trying to imply that in some alternative universe he might be right.That seems to be smacking down Perry's argument, not lending it credence.