Sghunta

I’m really not a Facebook or Twitter guy, you know? I’m a prime rib and baked potato guy

To some economists, the dire situation makes default inevitable, though it may be a few years away. The required austerity would be too punishing, says Desmond Lachman of the American Enterprise Institute. Greece would need spending cuts and tax increases equal to 10 percent of GDP, he says. The resulting savage recession would worsen the existing unemployment rate of about 10 percent. “No sane country is going to accept that,” says Lachman. Greece may get a temporary rescue, he thinks, but will someday miss debt payments and might revert to its old currency (the drachma).

Conceived as a way to unite Europe, the euro increasingly fosters conflict. No one wants Greece to default, but no one wants to pay the price of prevention. With its own currency, Lachman thinks, Greece will pursue depreciation to spur exports and economic revival. If other countries dump the euro, currency wars could ensue. But the threat to the euro bloc ultimately stems from an overcommitted welfare state. Greece’s situation is so difficult because a low birthrate and a rapidly graying population automatically increase old-age assistance even as the government tries to cut total spending.

Sarah Palin has a suggestion for how Barack Obama can save his presidency. “Say he decided to declare war on Iran,” she said on Fox News last week. “I think people would perhaps shift their thinking a little bit and decide, well, maybe he’s tougher than we think he is today.” Such talk is in the air again. Palin was picking up the idea from Daniel Pipes, a neoconservative Middle East expert who suggested a strike would reverse Obama’s political fortunes. (Actually, Palin attributed the idea to Patrick Buchanan, but obviously entirely misread Buchanan’s column, which opposed Pipes’s suggestion. It’s getting tiresome to keep pointing out these serial gaffes, but Palin does appear to be running for president.)

It is important to recognize the magnitude of what people like Sarah Palin are advocating. The United States is being asked to launch a military invasion of a state that poses no imminent threat to America, without sanction from any international body, and with few governments willing to publicly endorse such an action. Al Qaeda and its ilk would present it as the third American invasion of a Muslim nation in a decade, proof positive that the United States is engaged in a war of civilizations. Moderate Arab states and Muslim governments everywhere would be on the defensive. As Washington has surely come to realize, wars unleash forces that cannot be predicted or controlled.