Sarah Palin Still Terrifies Me

Sarah PalinThe Des Moines Register reported yesterday, Palin Compares Federal Debt to Slavery at Iowa Dinner. And you may well ask why I care. After all, Sarah Palin is always saying something stupid and she is always somewhere. This weekend, it was Iowa.

But I think it is important. I don’t care about the slavery bit and all her racist talk. What does bother me is this, “Our free stuff today is being paid for by taking money from our children and borrowing from China.” There are two things wrong with this sentence. First: China. It’s been a while since I’ve talked about this, so I think it is worth bringing up again. As I discussed in China Owns America! In Republican Ads, only 32% of our debt is owed to anyone outside the country; only 8% is owed to China. The vast majority of American debt is owed to ourselves.

I see this kind of fear that we are going to bury ourselves in debt—especially from conservatives. But it is based on an extremely poor understanding of finance. Consider this example. When I was 5-years-old, my parents bought a house for $17,000. It is now 44 years later. Imagine that they had kept that house all this time and had only paid the interest on it. Let’s also assume that their mortgage rate was 8%, which is actually kind of high. That would mean that today, they would be paying $113 per month in interest. Clearly, they would be better off having paid off the principle—$113 per month better off. But it’s not the case that they would be buried in principle. What’s more, they would now have a house that is worth about a quarter million dollars.

That brings us to the second problem with Palin’s sentence. We aren’t taking money away from our children by borrowing money today. That is especially true if we are using the money we borrow to invest in infrastructure, health, and education. College graduates are having a hard time finding jobs right now. And that will hurt them into the future. Having a low paying job or no job at all will be a big problem compared to that modest $113 mortgage we are supposedly saving our kids from.

The real concern about our “debt problem” is that in the future, the government will have to raise taxes on the rich. That’s why conservatives care about the issue. But I’m not sure that’s the reason that Palin cares about the issue. She seems more like the base of the conservative movement—someone like Amy Kremer. These kinds of people seem to have just decided to join the conservative movement and so they repeat the talking points without even understanding them. Of course, that makes them really dangerous if they ever get power. You can depend upon someone like Karl Rove to not do anything really crazy. He knows that most of the Republican talking points are nonsense. But if Palin were president, she really would allow the government to default. There would be no convincing here. She believes in conservative principles the same way she believes in Jesus.

Sadly, this is the legacy of the modern Republican Party. And as I’ve written about a lot here, it is wrong to think that a crazy Republican can’t become president. All it takes is a bad economy.

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About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

12 thoughts on “Sarah Palin Still Terrifies Me

  1. Actually, most of the "debt" doesn’t come from borrowing at all. The treasury dept creates credit, uses their computers to pass the credit along to the federal reserve which loans it to itself and other big banks for some nominal interest rate like 0.25% or less.
    The banks are then free to buy t-bills that carry a higher interest rate or they can leverage this and multiplt the amount by 10X and get into commodities and corner the market in anything from corn to cotton. The credit then shows up as dept, and will never be repaid. The benefit of this approach which is linked to "QE" is that asset prices from stocks to real estate are boosted and large banks are kept afloat, otherwise we have an even bigger repeat of 2008. If the Treasury Dept acted on the advice of the financial of well respected economist Sara Palin, the US economy would enter a very deep depression.

  2. Your main point about no-nothing repubicans obtaining and misusing power is already reality. Just look at the house of representatives. But I think it is important to understand that debt obsession is a tactic that repubilcans use to control economic policy when they are out of power. If a republican becomes president in 2016, all the the deficit talk will simply stop. There will be new imperatives(like war), that are suddenly far more important then some red ink.

  3. @Mark – Yes. I’ve read estimates that up to half of our debt simply vanishes because the Fed buys it and forgives it. In fact, instead of bailing all the banks out with TARP, the Fed could have stepped in and managed the whole thing. A lot of our high finance goes on for the purpose of keeping the "right kind of people" rich.

  4. @John. Absolutely. This was well on display during the large election. Romney’s main economic adviser was Greg Mankiw who has always been for stimulus during downturns in the past, was against them during Obama’s term, but softened his rhetoric as the election neared. The whole Republican Party was getting ready for a spending spree. What Cheney should have said is, "Everyone knows deficits don’t matter [i]when Republicans are in power[/i]."

    See: [url=]Republicans Don’t Care About Debt[/url]. It talks about how of the last 10 presidents, only 3 left with more debt than they started: Reagan and the two Bushes.

  5. Dimwitted Republican politicians may be barely capable of understanding the functioning principles of shoe-tying or operating doorknobs ("consarnit device!"), but the strategy people at their think tanks are very intelligent and are playing a very long con. Spend like Iowa car-dealers boozing up Vegas when in power, on popular things like war and tax breaks, then come back somber-faced and glumly suggest that popular but "costly" programs (meager social benefits) need to be slashed, for The Good Of Us All.

    Problem with a long con is, it takes a while to pull off. A lot of things can go wrong with the plan . . .

  6. @JMF – Thomas Frank’s argument ([url=]which I don’t exactly buy[/url]) is that Republicans do it [i]because[/i] they want to limit the Democratic Party when they are in power. What is really the case is that Republicans are [i]not[/i] for small government. They love big government, they just hate it when it is used for the common good. They think the government should be used to enrich the rich and beggar the rest.

  7. It seems to me that what the Republicans have done for decades is to run up huge amounts of debt through military build-up and outright war, coupled with a decrease in revenues by decreasing taxes on the wealthy. Then when a Dem comes along and starts to pay for things like Iraq and Afg, they scream bloody murder about big spending Democrats by pointing NOT at paying the Republicans’ bills but by bitching about entitlement programs, etc. Sad thing is, too many Americans fall for it every time.

  8. …And harkening back to the Palin Period is valid. It shows how frightening desperate the (extreme) right is, to be in power…..willing to do anything.
    Yikes, she is one scary woman:


  9. @markmac – That’s right. But it is even worse than this. My biggest complaint is with the New Democrats who totally buy into this stuff. Certainly it is true that for the last 5 years, Republicans have been complaining about the deficit. But from 2010 onward, the Democrats went right along with them.

    There is also this ridiculous idea of "fair play" among Democrats. Since the Republicans won the 2010 elections, many Democrats thought they should make concessions to the Republicans. I agree with how the Republicans reacted to their 2012 trouncing. I didn’t vote for Obama in 2008 so that he could just decide that the political winds had changed.

    I could deal with the extremist Republicans if I could just get a little liberalism from the Democrats!

  10. @Will – Here is some of her [url=]word salad[/url] from [i]this weekend[/i]:

    [quote]The plan is to allow those things that had been proposed over many years to reform a health-care system in America that certainly does need more help so that there’s more competition, there’s less tort reform threat, there’s less trajectory of the cost increases, and those plans have been proposed over and over again. And what thwarts those plans? It’s the far left. It’s President Obama and his supporters who will not allow the Republicans to usher in free market, patient-centered, doctor-patient relationship links to reform health care.[/quote]
    That’s very much an English-like substance. She good are saying things that sound like English but which have no actual content. And there is the woman that almost half the nation thought was qualified to be president. And fully a quarter still do!

  11. @Mark Seidner, "never be repaid" If its not a problem then why is an ever increasing percentage of the nationsl budget allocated to pay for it? No, for once Palin is right! Bigger government is a huge problem, for us and our descendents, that we citizens and our politicians are turning a blind eye to.

  12. @Ed – Mark is basically right. Money is not what people think it is. I stay out of discussions of monetary policy. I recommend reading Dean Baker.

    But what is this about "Bigger government is a huge problem"? Bigger than what? What is the perfect size of government? Our deficit has been decreasing at a rapid rate for the last four years. That’s been very bad for people today and especially young people who can’t find jobs. They [i]are[/i] our descendants.

    I really do not understand all the hand wringing about the size of government and debt. When it was getting vastly bigger under Reagan and Bush Jr, no one talked about it. When it actually got reduced under Clinton, most conservatives didn’t even notice it. And now, as the deficit gets smaller and smaller, to the point where if the economy ever really recovers, we will be paying [i]down[/i] the debt, there is more hysteria than ever. Jobs and inequality are our big problems, not "big" government.

    A broken clock may be right twice a day, but I’ve lived with broken clocks. I’ve known broken clocks. Broken clocks have been friends of mine. Sarah Palin, is no broken clock.

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