Israeli air strikes, gun debate, US economic news, drones in Africa,

1) The Israelis are increasingly uncomfortable with the evolving security situation in Syria. As the Syrian regime disintegrates, the risks of political instability escalate. For Israel, the primary concern (as evidenced by last night's IDF air strike) resides in the possibility of the Lebanese Hizballah accessing Assad's chemical weapons. Such a development would fundamentally challenge Israel's security/security posture. As I argued for the Huffington Post before Christmas, if Assad employs his chemical weapons, President Obama must order decisive US Military action. On a side note, with each passing day it becomes increasingly clear that the Syrian rebels will accept no outcome other than Assad's removal from power.

2) The Senate is currently hearing from various advocates on both sides of the increasingly polarised gun control debate. The left is trying to shred the second amendment and LaPierre, the PR nightmare to end all PR nightmares, retains false comfort in his self-created realm of delusion. Personally, I think that Congress should focus on improved background checks, better enforcement of existing laws and increased mental health information sharing.

3) The economy didn't have a great final quarter in 2012. The left are complaining that the cause for this retrenchment was spending cuts and that future cuts must therefore be avoided. In making this argument, they are obsessing over the short term. While in truth spending cuts will probably cause short term economic harm, without such cuts America will continue on a path towards the fiscal abyss. This would be a disaster. Ultimately, until we see comprehensive debt reform (cue medicare), economic growth will be suffocated by consumer/business doubt over the future.

4) The US Government is quietly improving its ISTAR/strike capability for operations against Islamist militants in West Africa. Because of the size and population sparsity that defines much of that region, drone platforms provide a crucial asset for on-going counter-terrorism efforts.

Enjoyed this. Earlier today, George Galloway was shut down by PM Cameron.

Fiscal Cliff?

The DC rumor mill is awash with news that a debt deal may be on the horizon. We shall see. Until news of a deal (or failure to reach a deal) becomes clear, I won't make any more comments. 

My most recent writings on this topic -

Why the fiscal cliff is preferable to the economic abyss

Compromise for Country - My plan to solve the national debt

A very bad night for the GOP

Tonight was a very bad night for the Republican Party. In failing to support Speaker Boehner's plan to avoid tax raises for 99.8% of Americans, far-right Republicans have handed President Obama a huge victory. They have empowered the President politically - allowing him to paint Republicans as intransigent ideologues servient only to the rich. And they have betrayed their obligation to their country. The obligation to put national interest before all else. And when we are facing a debt crisis, the national interest is important. 

What happens next? I suspect that the chances for a debt resolution before Christmas have evaporated. Speaker Boehner knows that he cannot agree to a deal that fails to address trend cost inflation in Medicare/Medicaid (As I have previously argued such a deal would be worthless) and President Obama now believes that he holds all the cards (the GOP still controls the House so at least on paper, the President is wrong). Common ground has become far more sparse. Unfortunately, because of this evening's antics, the public attitude towards the GOP will be extremely negative. Conservatives have dug ourselves into a hole. The President will appear as the great conciliator who has been frustrated by Republican intransigence. I do not believe that the President has negotiated fairly, but truth will be less important than perception.

This is my plan for resolving the debt crisis.

A debt deal, the fiscal cliff or the economic abyss?

In the absence of a major deal on debt reduction IE - $4 trillion+ ten year new revenue/sustaining trend savings (or at least a $2 trillion pay down with reliable future negotiations), the fiscal cliff would be the least bad option. Ultimately in the absence of a comprehensive deal, the economic outcome would be far worst. In this scenario the debt markets would continue to lose confidence in the future of the US economy. An ensuing confidence crisis would reverberate throughout the economy with continued restrained hiring by companies, as well as reduced capital purchases. In addition, the political landscape would be characterized by even greater partisanship and imbued negativity. In essence, the economy would become increasingly leeched by a growing condition of doubt - a doubt that would require resolution by a major debt deal or would inevitably result in the 'abyss'. What would the abyss mean? the economy would be characterized by a market induced risk premium on debt (leading to v. high interest rates), significant inflationary pressures, a collapse of the entitlement system and an evaporation of the already challenged trust in government. In addition, because of the Fed's present monetary policy to restrain interest rates, the abyss would occur in the context of higher interest rates and therefore an excess annual interest repayment level for the Federal Government of about $200 billion.

     In short, where the 'cliff' would be an economic tropical storm, the 'abyss' would be a category five economic hurricane.

Compromise for Country: How I would resolve our debt crisis

UPDATE= FOR 2013 UPDATE - CLICK HERE.

 Photo Credit: CBS News