There are just two stories that should be on everybody’s radar this week. The first is the “Fiscal Cliff” or, as I like to call, it the “Blame Game Theater.” The other big story is the Middle East. Both of these stories are multi-faceted. The “Fiscal Cliff” should be of great interest to all Americans. This is simply a disgrace, and both sides should be taken to the wood shed for letting this get out of control. The deal they have been talking about is less than half of what the Erskine Bowles commission was asking for (around $4 trillion), and that only slows the growth of government. Many say the best thing we could do is go over the “Fiscal Cliff. “ At least we would get some real spending cuts. I have taken some heat for suggesting tax increases. I DO NOT think taxing more so we can spend more is the answer, but blowing another bubble and putting it off only makes things worse.
In 2001, we should have gone into recession, but instead, we got a housing bubble. In 2008, we should have taken the big banks to receivership; instead, we bailed them out and continue to bail them out as they are technically insolvent. If they were solvent, we would not need phony accounting and a $40 billion a month bailout provided by the Fed to infinity. If we do go over the Fiscal Cliff, John Williams at Shadowstats.com says that “Would Trigger Confidence Problems That Never Could Be Recovered Fully.” This is not only a debt crisis, but a real crisis in leadership by both parties.
The other big story is the Middle East. They are trying to come to some solution in Syria, but both sides are still fighting it hot and heavy. 44,000 Syrians have died in the nearly two year old civil war, and there is really no end in sight. The fighting has already spilled over into surrounding countries and the possibility of a wider war is what makes this very dangerous.
On the Eastern side of the Middle East, Iran is conducting war games from the Persian Gulf to the Northern Indian Ocean. The U.S. and its allies have heavy presences there to stop Iran from blocking the Strait if war breaks out. 40% of the world’s sea-borne oil exports pass through the Strait of Hormuz. It makes me nervous when any country conducts war games in close proximity to potential adversaries. War can start by accident. It can also be started by either side on purpose. Either way, war in the Middle East would be a global disaster, especially with such a fragile global economy. By the way, nothing is settled between Israel, Iran and Hamas. I look for renewed fighting to break out in 2013.
Join Greg Hunter for the Weekly News Wrap-Up for his analysis of these stories and more.