First , the good news: A year from now civilization will still be intact and most Americans correctly will be looking forward to a very good 2004, in which the economy will be growing, President Bush will be admired through much of the world and his re-election will be almost certain. But, before the cheering must come the struggle. So follows the not completely cheerful predictions for 2003.
Washington politics will start out pitting the White House against congressional Republicans in a sometimes vituperative fight over federal spending. This will actually be a three-sided fight between the White House and conservative back-bench deficit-hawk Republicans , the appropriators and the Republican congressional leadership. The White House/conservative team will demand spending limits that can’t pass either the House or the Senate. The appropriators will be called rude names by conservatives. The leadership will try to take over from the appropriators, but will fail to get the low White House spending numbers passed. The Democrats will sit on the side lines and giggle. Ultimately, events will force spending far in excess of the early White House demands.
Deficit spending in fiscal year 2003-04 will top $300 billion. This will be the product of both higher defense and domestic spending and lower federal revenues due to a sputtering economy.
The still overpriced stock markets, facing low corporate profits, flagging consumer demand and some interruptions in world trade will drop about another 10 to 15 percent by the end of the year. Extreme volatility will make matters seem worse than they are.
The dollar will drop about 10 percent in value against the Euro, as our trade deficit continues to balloon.
Saddam Hussein and his Baath Party will be out of power in Iraq by the springtime. Our occupation of Iraq will be managed without any tragic incidents.
The fall of Saddam will trigger uprisings in at least two Middle East countries one such government will fall to a fundamentalist/jihadist regime, the other to a more or less pro-western, moderate, democratically inclined government.
The flow of oil temporarily will be slowed or stopped by these events. There will be a furious debate within the Bush administration and in Congress over whether to militarily intervene to secure the disrupted oil flows. Bush will decide to act. After an initially embarrassing series of U.S. military snafus and native sabotaging of the oil fields, order will be regained and by the winter oil will be flowing at record levels and the price of oil will settle at between $15 and $20 a barrel (after taking a wild ride to briefly over $100 on the spot market.)
There will be two major, but not catastrophic, terrorist attacks. One either will be in Europe or at sea. The other will be in the United States. It will be obvious to the public that the federal emergency response to the attack in the United States was poorly conceived and carried-out.
After the immediate shock and clean up, several Democratic Party leaders will badly misjudge the politics of those events. Democratic presidential aspirants will fall in to a contest to see who can criticize President Bush more harshly. By over-playing their hand, the Democratic leaders will lose the public. The public will rally to the President, despite the administrative failure surrounding the terrorist attack.
Hillary Clinton, who will have kept her head down through the post-attack politics, will step forward to salvage the Democratic Party from its self-inflicted damage. She will explain that based on her 8 years in the White House, she understands the terrible challenges a President faces. Whether she runs for president or not, she will establish herself as the natural leader of the Democratic Party. With the exception of Senator Lieberman, most of the other Democratic leaders will have permanently marginalized themselves by mismanaging the politics of terror.
Thanksgiving 2003 long will be remembered as a highly emotional coming together of the country, after which an explosion of optimism will create the most profitable Christmas shopping season on record.
That will be the turnaround moment for the U.S. economy. A December 1000-point run up of the Dow Jones average on the New York Stock Exchange will trigger the beginning of the boom of 2004.
North Korea will have gone back to sleep after a fitful springtime.
After a not-so-private call by Republican Party elders to take Dick Cheney off the ticket (in order to groom an heir apparent for 2008), President Bush will successfully convince them that Mr. Cheney must remain on the ticket for the good of the country.