Howard Richman has a nice piece over at the Ideal Taxes Association blog:
In it, he says Governor Palin’s November 30th interview with Greta restores his faith "that there is intelligence left within the Republican Party."
He references Governor Palin’s line that "we’ve already gone over the fiscal cliff, now it’s about how hard we hit bottom."
She’s right that we’re already over the fiscal cliff in that there’s not going to be a painless way to bring down the budget deficits and prevent the collapse that will occur if they continue to grow, in proportion to GDP.
Meanwhile, the House Republicans are currently negotiating an agreement with President Obama that will substitute $200 to $250 billion in budget cuts for the $502 billion that would place if no agreement was reached.
By not dealing with the problem right after the election, they are insuring that trillion dollar deficits will continue to raise the U.S. debt-to-GDP ratio into the forseeable future.
As Palin points out, they are simply postponing the pain and making it much much worse when it does come in the future. This future is easily foreseen:
Five to 10 years from now, when interest rates climb and the U.S. government debt-to-GDP ratio is higher than today, perhaps 150% to 200%, a spike in interest rates will cause the budget deficits to spike upward. The Federal Reserve will try to keep interest rates low in order to prevent a U.S. government default, and in the process they will create high inflation. Then the dollar crashes and the American standard of living hits the ground with a splat.
And the House Republicans are agreeing to this, even though they have to sell out their fiscal conservative base to do so.
Sarah Palin has so much economic common sense. She’s for:
- balanced budgets
- eliminating the corporate income tax
- balanced trade
- balanced monetary growth
That’s precisely the recipe for stable economic growth with low unemployment. Too bad the rest of the Republican Party hasn’t figured it out.
Here’s the great interview Richman is referring to: