US Debt Debate

Fundamentals: There seems to be four different possible outcomes to the US debt ceiling crisis: 1) President Obama could evoke the 14th amendment and raise the debt ceiling by executive order. If this happened there would be no spending cuts and US debt would get downgraded by the rating agencies. This would jack interest rates and threaten the recovery. 2) The Republicans are trying to pass a resolution in the House that will cut spending by a couple trillion, keep taxes the same, and raise the debt limit only enough to put the issue back into play right before the next election. This is the best scenario on the table right now because it would make cutting the deficit the center piece of the next election. 3) Democrats have a plan where they pretend to cut spending after the election, which they can then ignore if they keep control of the Senate. This would be very bad. 4) If there is no resolution before August 2, then the US will not default on its debt because Treasury can pay interest on the debt, pay all of social security, and keep the Pentagon fully funded with incoming tax receipts. But every other Federal obligation would be in jeopardy. So the rating agencies would probably radically downgrade US debt, which would really jack interest rates and probably trigger another recession.

Long War: Qatar is providing the Libyan rebels with advanced mine detection vehicles to get through the huge mine fields around Brega. Qatar is also ramping up its support for the rebels in a hundred other ways. The rebels are saying that Gaddafi can stay in Libya if he surrenders and agress to live in a highly guarded compound. Presumably Qatar and the CIA are involved in these talks and there may be an endgame in the Libya War.

If Gaddafi were to fall, the rebellion in Syria would explode. The Syrian rebels would see that the sacrifice and misery they have endured could result in victory. The US would have no choice but to support the newly energized Syrian rebels because Assad's government is a puppet of Iran's and Iran will do whatever it takes to keep control of Syria. Remember, Iran's other puppets (the Houthi rebels in northern Yemen and Hezbollah in Lebanon) have made big gains lately. Also, Iran is now supporting Shiite rebels in Iraq with advanced weapons. Iran is on the march and the US cannot allow this. The US public will not want any US involvement in the Syrian rebellion, but perhaps the CIA can get the job done without raising any red flags in the media. It will have to act through Saudi Arabia as it is now acting through Qatar in Libya. There is some evidence of Saudi involvement in Syria already.

The CIA has killed yet another Iranian nuclear weapon researcher in Tehran. This is good news to Saudi Arabia and may help goad them into helping in Yemen and Syria.

In Yemen, Al-Qaeda suicide bombers are hitting Yemeni Army supply convoys that are supporting the war effort in the south. This is hurting the momentum of the good guys and this little war is forming a stalemate. A New York Times Mideast correspondent described what happened when Al-Qaeda took control of Abyan province a few months ago. Jihadist fighters broke into bank vaults and seized stacks of hard currency. The bad guys didn't pocket this loot. Instead they handed it out to people on the street. So we can see that Al-Qaeda is 100% free of corruption and has incredible discipline. This just shows how hard it will be to defeat these bad guys.