In simple terms? Palin would have been declared unfit for office within six months. Or she would have tried to quit. Because McCain, in that scenario, would have died from a heart attack after the Big Banking collapse in 2008 or so. That's a complicated problem and one that conservatives don't have the stomach or the intelligence, generally, to fix. People bash Obama endlessly for spending his way through it, but truth is, if you _don't_ do that sort of thing and _let_ the economy run out of money and liquid assets entirely, you trigger a Depression. For reals.
Whole states would have gone bankrupt, not just cities. Detroit would be in anarchy because there would be No Jobs Left at all. China would be demanding that we clean up and fly straight--everyone would have downgraded our credit rating and insistetd on immediate austerity measures that would simply make the problems all the worse, because shifting the economy into an even lower gear means even _less_ ready cash and _less_ chance of growing jobs, tax bases and recovery.
At worst, if Palin _had to_ stay in office? The nation would fall apart. Entirely. Odds are China would "reposess" the West Coast, much to the dismay of Mexico, Saudi Arabia would "lay claim" to the Gulf States, while NATO and the UK would step in to "stabilize" the East Coast. Only. _Maybe_ Canada would be allowed to help out with the states in a loose triangle south of the Great Lakes, bordered by the Mississippi and Ohio Rivers, but it's doubtful.
The rest of the Nation would be in anarchy as Mexico unofficially goes to war with Texas to take back what it can get. And while the rest of the nation just plain goes batsh=t insane.
Seriously. Nobody wants America to be as ruined and bankrupt as Somalia. Well, nobody but Wall Street, but hey.