• 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.

My first thought when the news broke on Monday night about the deal to extend the Bush Era Tax cuts: The Republicans secretly placed a new script on President Obama’s TelePrompTer: “I now love tax breaks for millionaires!”

Barack Obama finally became an engaged President. He made a deal designed to get the economy moving by 2012 so that he can get re-elected. The fact that the Left hates this deal shows that Obama is trying to seize the center—again—and win the 2012 election.

Obama’s first two years of massive federal spending—corporate takeovers, TARP and the Stimulus Bill—failed miserably to generate private sector economic growth. And time is running out for him to wait for the economy to start growing.

As a friend of mine put it, 9% unemployment is the over/under for Obama’s re-election chances. Above 9% and he is toast (unless the GOP nominates Palin) and under 9% and he has a fighting chance to be re-elected on the argument that “I have gotten our economy back on track.”

Now Obama has channeled Ronald Reagan with his payroll tax cut and agreement to keep the Bush Ear tax cuts in effect and even to cut the estate tax rates. No wonder the Left is going nuts! Their great hope—Barack Obama—is more Reagan and Bush than they can stomach!

The only loser in this arrangement is the long-term financial viability of our nation as another almost-one trillion dollars will be added onto the already staggering $14Trillion debt we are carrying.

But the President and the GOP leadership decided it was more important to juice the economy now—in advance of the 2012 election (after all, everyone in the House is up for re-election in 2012, too)—and worry about the debt later.

If it works, Obama can get himself re-elected in 2012. If it does not work, the consequences for both parties will be catastrophic. The anger that catapulted the Tea Party Movement to political prominence this year will compound itself into a “throw ‘em all out” fury in 2012.

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.