Sarah Palin accused Treasury Secretary Tim Geithner of crying-wolf on the dangers of not raising the debt ceiling during her interview this week on Fox News Sunday. Apparently she doesn't believe that it would be harmful to the American, or the world's economy for that matter for our credit rating to be lowered and that it is somehow possible to partially default without the bond markets reacting well before that drop-dead date given by Geithner.

Palin claimed "We can make sure that we are funding the debt service and our highest priorities first. And other things are going to have to wait, Chris. Again, we have no choice. It's common sense." Wallace failed to ask her who she thought the government should start defaulting on if we cannot pay all of our obligations.

Palin also said that despite her objections to seeing the debt ceiling raised, she did believe Congress would ultimately raise it, but that they had better get something in return for it, like a balanced budget and more drilling in ANWR in Alaska.

So add Palin to the list of Republicans who are willing to play a dangerous game of chicken and hostage taking in exchange for their vote on that debt ceiling.

UPDATE: I just saw this over at Think Progress -- Failing To Raise Debt Ceiling Could Cause Bigger GDP Drop Than The 2008 Recession. Go read the whole post but for a simple illustration of just how dangerous this little game the Republicans are playing is, check out this chart they made showing the potential damage this would do to our economy.

Transcript below the fold.

WALLACE: You talked about the fact we're going broke. And I think everybody would agree with that. Let's turn to the issue of the national debt, because you say you don't believe Treasury Secretary Geithner when he talks about this drop-dead date of catastrophe if will to raise the debt limit by August 2nd. But, Governor, this week, Moody's said that they are going to lower our credit rating for our debt unless we raise the limit, the debt limit, by August 2nd, also they said they may lower our rating if we fail to come up with a serious reduction plan.

So, the question is, wouldn't that be a financial disaster?

PALIN: I don't believe Tim Geithner as cries wolf for the fourth time now, telling us that there is a drop-dead date and crisis will ensue, and economic woes will befall us even greater than they already are if we don't increase the debt limit. He's told us this a couple of times now. In fact, I believe it's four times now where there's a --

WALLACE: What about Moody's saying that what they're saying?

PALIN: Moody's message is very powerful and that should be the warning the American public to make sure that are electing congressmen and women who hold the purse strings in this nation to quit incurring the debt. We rake in $58 billion a day, our federal government, via payroll taxes and or other revenue sources. If we prioritize and took that $68 billion a day and service our debt, we don't have to raise that debt ceiling.

We can make sure that we are funding the debt service and our highest priorities first. And other things are going to have to wait, Chris. Again, we have no choice. It's common sense.

WALLACE: I just want to make sure I'm clear. So, you're saying no deal for deficit reduction. Don't raise the debt limit.

PALIN: I have -- I know that the debt ceiling will be raised, whether I want it to be raised or not. There is a majority in Congress, both sides of the aisle, that will raise the debt ceiling. If I were in Congress, though, I would be a "no" vote to raising that debt ceiling. I would send that message that it is failed leadership in the White House and with our elected officials when they have allowed to us to get this breaking point, if you will, that Moody's is warning about.

So, I vote no on the debt ceiling. It's just going to allow the big spenders another tool to continue to increase debt.

So, I believe that the debt ceiling will be raised. But for those who are already committed to voting for it, they better get something out of it for "We the people." They better get a balanced budget. They better get commensurate cuts in federal spending that equate to that increase in debt, because they're going to keep incurring more and more.

How about people like Senator Begich, a Democrat from Alaska. He better get ANWR in this bill, opening another domestic source of energy up there in Alaska when he votes yes for increasing the debt ceiling.

WALLACE: Let me --

PALIN: These folks better get something out of it.