In the wake of the killing of Osama bin Laden, self-elected political experts are rushing to proclaim, “President Obama is now guaranteed to win again in 2012!”

A word of caution: not so fast.

In 1945, less than six months after he led Great Britain out of the darkest days in her history to defeat Nazi Germany, Prime Minister Winston Churchill was himself defeated at the polls.

More recently, in 1991 President George H.W. Bush defeated Sadaam Hussein’s forces in Kuwait and drove them back into Iraq. By May of 1991 President Bush had a record-high 91% approval rating. Yet 18 months later, Mr. Bush received a mere 37% of the vote in losing to Bill Clinton (and Ross Perot).

So anyone who thinks this wonderful, long-awaited killing of Osama bin Laden guarantees President Obama’s re-election 18 months from now is just plain mistaken and short-sighted.

However, here is a simple, two-point plan that would almost guarantee Obama’s re-election:

1) Use this long-awaited killing of Osama bin Laden as the point of demarcation for the U.S. to end its occupation of Afghanistan. The President could announce, in effect, “We have succeeded in our first mission–to capture or kill Osama bin Laden–and we will leave behind a skeleton force to guarantee our second mission–that Afghanistan will not become the launching pad for more attacks on the United States.”

The President could then order a drawdown of 90,000 troops and leave 5,000-10,000 either in Afghanistan or in the theater to monitor future terrorist activities in Afghanistan.

As for the effect of this withdrawal on the future of Pakistan, their obvious complicity in hiding Bin Laden disqualifies them as an American ally worthy of our help and protection.

In other words, to Hell with them.

2) Obama’s other action which would virtually guarantee his re-election is to make The Grand Bargain–the deal with the Republicans and Tea party Congressmen to cut the National Debt and deficits by changing Pentagon, Social Security, Medicare and Medicaid spending in a fundamental way.

If he did this, the financial markets would rejoice and foreign investors would flock to the US. The reaction would be positive–that the US has finally addressed its long-term budget problems.

Declaring victory in Afghanistan and withdrawing most of our forces and seriously implementing a debt reduction program would leave the GOP almost nowhere to run in 2012. The key voting bloc–independents–would go for Obama in a big, big way.

Only one caveat: if the economy goes back in the tank, then Obama would still have trouble in 2012. Barring that, he’d be heavily favored.

Let’s hope he doesn’t read this column.

Now that the preliminary fights—last week’s relatively-trivial struggle over a mere $38 billion in cuts—are over, we are about to proceed to the most epic and important national debate of our lifetime.

This is the imminent vote in Congress to raise the national debt ceiling. Without an affirmative vote by Congress and subsequent presidential signing, the federal government will no longer be able to borrow money by issuing debt (selling U.S. Treasury bills) and will then soon be incapable of paying its bills, including interest payments to US bond-holders.

In effect, we will “go bust.”

Or, the United States of America—the greatest nation ever created—will have squandered all we have been given and spent ourselves into Third World status.

But there is indeed another option: we can use this upcoming debt ceiling vote to force the radical spending and tax changes that are necessary to set us back on a sane course.

Specifically, this means we must:

• Fix the negative long-term downward trend of Social Security;

• The same applies to Medicare;

• Medicaid is rife with rip-offs from nursing homes and doctors; this has to be totally overhauled;

• Pentagon spending, which gets a free pass from too many on the Right, needs an overhaul in its spending and contracting processes;

• The tax code needs a major revamp—to make it fairer and to capture more revenue;

All of these are major, wrenching, difficult, politically suicidal steps – and they will all have to be addressed simultaneously in order to garner the necessary votes to raise the debt ceiling.

As of now, the votes are not available to pass an increase in the debt ceiling. The 87 Tea Party freshmen in the House have told Speaker Boehner they will not vote to increase the debt ceiling.

The White House and the Treasury Department are secretly in a state of near-panic over the possibility that the debt ceiling will not be raised.

Thus we have this once-in-a-lifetime opportunity to save this country.

And the Hand of God is involved: the Tea Party Movement, which arose over the debt, is now positioned in Congress to leverage this debt ceiling vote into a long-term plan to pay down the national debt.

In other words, the Tea Party Movement is going to force the two parties and the political Establishment inside the DC Beltway to undo decades of irresponsible federal spending.

The rhetoric will be epic. The anger real. The fear palpable. The demonizing of the Tea Partiers will be savage.

But, here is my prediction: by early summer, Obama and the Left and Boehner, McConnell and the Right will make the Grand Bargain: major changes in all of the above, embraced by both sides, and forced by the courage of outsiders from the Tea Party who brought fiscal sanity to the process.

America will once again admit its problems—and fix them. Thank God.

As President Obama’s ratings again slip into the low-to-mid 40’s, no potential Republican candidate is even close to capturing the imagination and fervor of the huge built-in anti-Obama sentiment inside the GOP, Tea Party and conservative movement.

In fact, the candidates are failing so badly that unelectable names like Donald “I love Hillary and Bill and I have donated tons of cash to liberal Democrats all across this country” Trump and Newt “I cheated on two wives because I love my country so much” Gingrich are actually getting news coverage.

If these two clowns are getting coverage, it tells us that we have no one.

And the so-called serious candidates, like Mitt “I invented ObamaCare before Obama!” Romney and Haley “I was the best danged lobbyist you ever done seen!” Barbour and Tim “I will be all things to all people!” Pawlenty are most definitely not catching fire. In fact, the more they are seen, the less they are liked. Quote after quote from audience members at each public appearance highlight the fact that there is just no passion for any of these men—while there is uber passion to defeat the President in 2012.

At the same time, there is rising discontent on the Right with the GOP House leadership. Speaker Boehner is caught between a rock and a hard place: if he tries to forge deals with the Senate Democrats and the White House, his Tea Party freshmen revolt. Conversely, when he assuages the Right, he has to take such hard-line positions that no deal with the Democrats is possible.

As predicted here before, the Debt Ceiling Increase vote will be an epic battle between the GOP leadership and the Tea Party. It will likely shatter the fragile GOP-Tea Party coalition.

Indeed, Tea Party members all around the nation today are growing increasingly hostile to the GOP—with long-time stalwarts like Orrin Hatch and Richard Lugar sure to face difficult primaries in 2012.

Meanwhile, what has happened to the Revolution in the Middle East? Has it fizzled—or is it merely taking a respite?

Egypt: after the initial post-Mubarak heady days of seeming victory, things are back to normal. And it is worth asking: will the Army really allow its power to be diminished by democratic elections? Or will they rig them like all the previous elections?

Libya: Khaddafi has—so far—survived. He butchers his people. It looks like he will stay – at least for a while.

Saudia Arabia and Bahrain: The Saudi Royal Family has learned its lessons and brutally repressed any demonstrations in the Kingdom—and even has crossed into Bahrain to put down Shi’a demonstrations against the Suni Bahraini leadership.

Thus, the sweeping pro-freedom revolution appears to have fizzled out.

Japan: the earthquake, tsunami and nuclear meltdown will be used by the Left here to try to stop future nuclear reactors—at a time we need them to offset our dependence of foreign oil.

Here we have oil prices spiking—has anyone thought about $5 per gallon?—and yet the Environmental Left won’t let us drill and also wants to stop future nuclear reactors.

How are we to acquire energy?

Conclusion: the American economy remains in a morass and thus Obama, too, is languishing. But the GOP is in even worse shape.

The only salvation would be a new candidate—spunky and smart—who can unite the Tea Party passion and the GOP and then harness the fervent anti-Obama sentiment that is lurking out there.

When you find that candidate, please give me a call.

We are witnessing today—for the first time in American history—a roll-back of government at the state level and, perhaps even at the federal level, as well.

This concept—limited and smaller government—has been the basic precept of American conservatism for decades. But it has never been enacted—even under conservatives. Ronald Reagan, our greatest conservative politician, as governor in California and as president did not shrink government; he only decreased the rate of increase.

Other so-called “conservatives,” like the two President George Bushes, grew government, increased the deficits and national debt, and made a mockery of the once-clear distinction between Republicans and Democrats.

But the 2008 subprime mortgage meltdown and subsequent recession/depression have now rippled all the way through our economy. First it was the still-ongoing housing crash followed by massive private sector lay-offs. That has lead to a precipitous drop in government tax revenues and an equal increase in new government pay-outs for unemployment benefits.

The result of this is near or virtual bankruptcy in many states—New York, New Jersey, California, Illinois and the other upper mid-west states. But because of state constitutional mandates requiring an annual balanced budget, governors from both political parties are faced with the same problem: how to either cut government costs or raise revenues. Only Illinois has implemented a massive personal income tax increase; all the other states are instead trying to cut costs, realizing that tax increases during a recession will drive businesses out of their states.

And that leads us to Wisconsin. There the Republican governor and state legislature has identified the long-term culprit as spiraling public labor costs, including not just salaries but especially health care contributions and retirement, as the area that must be brought back into balance with private sector workers.

The questions are simple: why should public employees not pay more for their share of health costs and retirement? If private sector workers have to pay their fare share, shouldn’t government workers, too?

This is not an assault on labor—although Big Labor and the Obama White House are trying to make it such. No, this is the pendulum swinging back to the economic and political center. Government workers are not being fired or laid off; that is the last option governors are taking. Instead, the idea is to reduce costs and try to save these jobs.

But there has developed a new—and arrogant—mentality in our nation over the past fifty years: government workers—town, county, state and federal—have grown to expect special privileges and extra benefits as part of the job. Thus, in many ways, these jobs are cushier and more secure than their private sector counter-parts. These jobs have become a special, protected, superior class of workers.

This is a far cry from fifty or more years ago when a “government job” was a lesser job than a private sector job. There used to be a stigma—“you are second rate if you have to work for the government”—attached to these jobs. But, in the 1960’s, that began to change. Public workers grew in number as government grew under LBJ’s Great Society. Unionization then soon came for these people. Public teachers, especially, became the single most active on-the-ground field workers for the Democratic Party. In fact, at every Democratic National Convention, public teachers are the largest group of delegates, thus demonstrating their crucial role in the Democrat Party.

When Democrats won state houses, they rewarded their friends by giving them the very benefits that are now about to be taken away in Wisconsin and soon other states, as well.

Plain and simply put: we are broke. We have to cut some benefits from everyone. No one is excluded—not even government workers—and that will soon include seniors once entitlements come under reform. (And they will.)

One more related thought: it has taken about 30 years to go from a National Debt of under $1 Trillion (1981) to over $14.2 Trillion today. OK, that is 30 years—under presidents of both parties.

This problem cannot be solved overnight, or in one year or five.

Why not this plan: Congress adopts a 30-year pay-off-the-National-Debt Plan—just like any of us would agree with a lender to pay off a debt over time. We steadily pay down the National Debt, year after year, through cuts in spending and entitlement reforms, until we are debt-free. $500 billion per year—no matter what. That times 30 years and the National Debt is gone—and so, too, is the $1 Trillon per year interest payment we are paying each year before we pay a soldier or issue a Social Security check.


The markets would rejoice over this plan. The dollar would strengthen. America would be seen as finally addressing its most serious long-term problem.

The United States of America always faces up to its problems. And solves them. Maybe not as quickly as we’d like, but the system drives us to fixing the mistakes we have made. The rise of the Tea Party movement—based on citizen outrage like that seen at the Boston Tea Party—is driven by the realization that our debt will soon bankrupt us.

That spirit is what is at stake today in Wisconsin and Albany and even in the House of Representatives in DC.

When all is said and done, the long-held conservative dream of a smaller, less-intrusive government will be realized.

• By the end of the year, the unemployment rate will still be unacceptably too high–in the 8 - 8.5% range. And that will turn the country even more sour about the economy, the future and the 2012 elections.

• Articles will appear asking this question: has any incumbent president ever been re-elected with unemployment north of 7% or 8%?

• While President Obama will not have a Democratic Party challenger, he will be viewed as beatable in November 2012. The Upper Mid-West–from Ohio to Minnesota–all states he won in 2008–will now be against him and his Electoral College math will be difficult.

• Both parties are going to be viewed negatively by the end of 2011 precisely because the economy continues to flounder.

• GOP control of the House will cause a split inside the Republicans between Tea Party conservatives who want to address the National Debt and regular Republicans who want to cut more taxes to stimulate the economy.

• Sarah Palin will continue to dominate the talk of the GOP race for the presidential nomination. She will continue to prevent any other new “star” to emerge from the pack.

• By the end of 2011 no Republican will have emerged as the favorite for the GOP presidential nomination. Sarah Palin will still the most talked-about Republican candidate. She will have catchy one-liners at the TV debates which begin in June. There will be eight white guys—and Palin—up on the stage—and she will dominate the news of these debates.

• Instead, there will—again—be a flavor du jour—a new, hot, favorite candidate, each of whom lasts for a week or two only to fade and be replaced by the next faddish wave.

• A Big Fight will be over the extension of the Debt Ceiling. This has to be voted on by the House and Senate. The establishment is already saying to the new Tea Party elected conservatives, “You have to vote to extend the debt ceiling!” And these Tea Party-backed new Senators and Congressmen are replying, “I did NOT come here to run up more debt!!!” So look out for an explosion over this by spring.

• Cathleen Parker doesn’t make it to March 1 on CNN’s Parker/Spitzer. And the show itself–so dreadful you cannot watch it–doesn’t last past May 1. And if it does last longer it is only because everything on that network is unwatchable.

• The Big Scandal–written about in this space a few years ago–is still simmering. This is a scandal bigger than Watergate. It envelopes both major political parties. There will be progress in 2011 in blowing this open. And if it does blow, it will severely alter the 2012 presidential race.

As 2010 comes to an end, a few observations:

1) TIME MAGAZINE proved its irrelevance and reinforced why it is in terminal decline by naming Mark Zuckerberg, the founder of FACEBOOK—featured in THE SOCIAL NETWORK hit movie this past summer—as its 2010 PERSON OF THE YEAR. Are they kidding? In a year of Tea Party political revolution and Wikileaks treachery and heroic Chilean miners, this man is the most important man of 2010?

2) American politics has now disintegrated into near-anarchy. If a Republican Member of Congress even talks about working with President Obama, he/she is demonized. The word “compromise” is banned from our vocabulary—to be replaced by finding “common ground.” How exactly are we going to get anything done like tax cuts and soon–hopefully—spending cuts if we will not work with the (elected) White House? Isn’t politics the art of getting as much of what you can get now and then, in the next election, trying to win more power to do even more?

I hear some talk radio hosts and Sarah Palin and others decrying this tax cut deal. Interesting. These are the same people who were totally in the tank for G.W. Bush and a Republican Congress who were more liberal and fiscally irresponsible than anyone we have seen on the political scene in years! But now they’re fiscal conservatives?

I love almost all conservative talk radio hosts, but they got all flummoxed up with Bush. And because of Bush we have Obama. If Bush had ruled properly, there is no way someone so outside the American political mainstream as Barack Obama would ever have won the White House. But G.W. Bush blew it so badly that the country reacted by going to the other extreme. Thus, we have Obama.

3) No, the tax deal isn’t perfect. But the GOP—not the Tea Party movement—has been fixated on tax cuts over everything and anything else. Wasn’t the lesson of 2010 that we need to cut the National Debt and reduce the size of government? Isn’t our precarious fiscal situation in part responsible for the mess our national economy is in? Yet the GOP pushes these tax cuts over debt reduction—and in that conflict will come the imminent Civil War inside the GOP and the conservative movement.

4) I proudly voted in Congress in 1981 for the Reagan Tax Cuts—with one HUGE reservation: where were some spending cuts? We never had them!!! Yes, we were in a Democratic House, but couldn’t the GOP have tried harder to cut government? So, while the tax cuts did indeed reinvigorate the national economy, the Federal Government exploded in size. And we are today paying for that constant spending–which happened again under G. W. Bush and a GOP Congress: tax cuts, two wars with no one paying for them and then this idiotic Medicare Prescription Drug Benefit–an entitlement put in by Republicans!!!

5) No wonder the Tea Party has come along. And no wonder the Republican Party cannot find its way.

6) The Tea Party movement, not Mark Zuckerberg, should have been the PERSON OF THE YEAR. The Tea Party is the only entity keeping a fiscal eye on the ball in DC.

The United States of America is on the verge of national bankruptcy—in reality if not technically. The printing press can—for a while—disguise how insolvent we are becoming. But we are indeed headed in the direction of Portugal, Ireland, Greece, Spain and other governments which are broke.

We have maxed out our national credit card. A 14 trillion dollar national debt—which requires a one trillion dollar annual interest payment—is a national disgrace.

And you can thank both political parties for it. Yes, the Republicans are as equally responsible as the Democrats for thirty years of profligacy.

OK. Let’s not spend valuable time looking backwards; let’s instead figure out how to solve the problem:

1) The just-completed Commission on the National Debt was a terrific first step on the road to having DC address the problem. They began the process of educating the American people on the specific solutions on both the spending and revenue ends of this problem;

2) The Tea Party Movement of the last year has heroically led the way on these Big Concepts: federal spending must be cut, the deficits eliminated and the debt paid down. That is the only way to save our nation.

3) But the Tea Party Movement never had to deal with the specifics of how to do this. They did not have to put meat on the skeleton of Debt Reduction;

4) Make no mistake: cutting programs and raising revenue are now the predominant political issue of our time.

5) Friday’s devastatingly bad jobs numbers reinforce the hopelessness of the American economy today. We are not going to regenerate a once-vibrant economy while saddled with so much debt—federal, state and personal.

6) But—and this is the Big BUT—making the cuts in entitlements and the Pentagon and agreeing to changes in taxes that can be called “raising taxes” is where things will get very, very difficult because many of the same people in the House and Senate who created this ongoing disaster are the ones deciding how to fix it.

7) Every single item in our federal budget has been put there over the years through a concerted, detailed and orchestrated lobbying campaign often supported by powerful political constituencies and huge campaign contributions. To now remove, cut-back, re-jigger or alter any of them is going to cause a war inside DC.

8) The President—who has spent money like a madman during his first two years—has an opportunity now to re-make his so-far disastrous presidency: He can either remain a detached, hard-left liberal who has lost the American center and is a greatly reduced figure after the mid-terms or he can transform himself into a leader who seizes this debt issue as his issue and re-makes the national debate on terms that help him. And, politically, he can salvage his presidency and even get himself re-elected if he does this correctly. He will have to take on the hard left and the hard right—but in the process will re-take the more-valuable center—in order to do this.

9) The debate on how to fix our debt problem has begun. What we do not yet know is who will star in this debate. Will it be Barack Obama, who has no expertise in federal budget issues or in economics but is the POTUS and thus can command any stage any time he wants? Will it be GOP rising star Paul Ryan, the incoming chairman of the House Budget Committee? Or will it me someone not yet on our radar screen?

10) Whoever it is, the issue—saving our national economy—is the issue of our lifetime.

A short and quick thought: the National Debt is going to drag our nation down and down into second-rate national status. It is a huge drain on our economy. The massive interest payment each year is the second largest item in our annual budget.

Plus China, Japan and others–by buying our debt–acquire power over us. Not a smart move by us to have Beijing have an upper hand over us.

And of course we are cheapening the value of the dollar.

The rise of the Tea Party movement–mainly to combat this debt situation–is a miracle and a sign of the Hand of God. Indeed, the American grass roots are not going to let politicians keep ruining our country.

And now that the GOP/Tea Party/conservatives have won the 2010 elections, an amazing phenomenon is about to occur: we, as a nation, are entering a multi-year national debate about how to reduce the National Debt and finally get our federal fiscal house in order.

Last week’s preliminary chairmen’s report on the Deficit Reduction Commission–co-chaired by Erskine Bowles and former Senator Simpson–is the first move of many to come to address the systemic problems (entitlements and Pentagon spending) we have.

What this is going to take is national leadership. If President Obama takes ahold of this issue he can rescue his otherwise-failing presidency and maybe even get himself re-elected.

But if he fumbles it–as he seems to fumble just about everything–then the GOP will capture this issue for the 2012 presidential election, in which the fiscal issues will trump the social issues.

Make no mistake: this is the pre-eminent issue of our time. We are on the verge of bankruptcy – and we must reverse course now. To do so is going to incur the wrath of many of our fellow citizens.

Can we do it?

Yes.

But it is going to be very, very difficult and will require tremendous political courage and skill.

Here is a terrible conundrum: we all want our fellow Americans to do well, to be happy, to find the jobs they desire. We all want the economy to recover–and soon. But if that recovery happens, it is likely that Barack Obama will get the credit (presidents get the blame or credit regardless of what they do) and will be a strong favorite to be re-elected in 2012. Furthermore, his Big Government spending spree will be credited with the recovery–just as FDR’s New Deal “cured” the Great Depression. For generations to come, historians, political scientists and economists will once again praise massive federal spending as the sure-fire cure-all for economic problems.

On the other hand, we can’t be rooting for the economy to remain lifeless. Yes, that might very well spell doom for President Obama’s chances in 2012. But do we want years more of the misery we are experiencing now?

No!

So we root for economic recovery. And if the price is Obama gets re-elected, so be it. Maybe the Republican House and a 2012-elected GOP-controlled Senate can restrain the worst of Obama.

By the way, many economists do not believe we are poised for a real job-creating recovery. The stimulus was a flop. And there isn’t enough in the system to ignite a true recovery. Thus the Fed’s move to buy $600 billion more of Treasuries as yet another way to inject liquidity into a frozen lending and investing situation.

Meanwhile the 2010 election is over. The Republican/Tea Party/conservative movement has won a startlingly large victory. President Obama and Nancy Pelosi have been severely rebuked by the American people–even though they don’t seem to understand why.

The next—and only order of business—re-invigorating the economy–will include major decisions over taxes, the raising of the National Debt Limit, and the hardest of them all: curtailing entitlement and Pentagon spending.

The American business community will be watching carefully. DC’s decisions will determine whether or not consumers, banks and business begin spending again and thus hiring workers again.

But here is the crux of the matter: if the economy does not improve and if the unemployment numbers don’t drop substantially by the 2012 election, both parties and President Obama will have a hard time being re-elected. This year’s Tea Party anti-establishment fervor will seem like a festive holiday compared to what will greet the Political Establishment in 2012 unless things improve.

There will be an opening for a credible Independent Candidate to come along and run against both political parties.

We do not–as of today–know who this person might be. But with the power of on-line fundraising, this Independent Candidate does not have to be rich, ala Ross Perot in 1992. No, nowadays you can raise the money from hundreds of thousands of people online in the snap of a finger.

Conversely, if things do improve by 2012, then Obama and incumbents in both parties will most likely be re-elected. We will have more status quo, with no one wanting to rock the boat by making any large, revolutionary structural changes. Thus, the deficits and debt will continue.

Conclusion: the United States is in deep, deep trouble–all caused by our own addiction to personal, state and federal debt. In the long run we might overcome this problem, but we have a long way to go before we get there. Politically, the results of this debt-ridden economy are going to roil us for several more election cycles. We are billiard-balling back and forth–from the Republicans to the Democrats and back–in rapid time. The voters are impatient. They are shopping for someone and some party to fix this mess. The GOP has been given a new life. Will they make the right moves? Or will they misstep–again–and hand it back to the Democrats?

Stay tuned. We’ll find out in the next year.