The Iraq war and subsequent occupation ran up bills of another $1 trillion and the Afghan war, with no end in sight, is at half a trillion dollars and counting.

Together, a government that's broke and a dysfunctional Congress, whose grand design is to kick the can into another year, shouldn't be surprised to see the erosion of America's power to influence events abroad.

Calling it a slide into Third World status, The Economist, still the world's most prestigious publication, points out, among scores of examples in some 30 states, that Hawaii has gone beyond laying off teachers and is now laying off students; that in Atlanta's Clayton County suburb the entire bus system is shut down; that Colorado Springs turned off one-third of its 24,000 street lights; that Camden, NJ, is planning to shutter its public library; and that in some cash-strapped locations, local authorities are giving up paved roads and returning to gravel -- or to nature.

By demanding more from their political and business leaders -- and even from themselves -- the people will determine whether America becomes a Third World country or the "more perfect union" the Founding Fathers envisaged, The Economist pontificated.

The transition to the second industrial revolution and a more perfect union will entail radical changes in secondary education where the United States is now treading water in the middle of the global pack. Science, math and literacy are woefully inadequate to cope with the new hybrid of chemistry, engineering and physics.

Nano-technology is about to change every aspect of our lives and usher in the next technology-driven industrial revolution. From sources of energy to drugs to healthcare -- and above all weapons -- this revolution will have a greater impact on society than the first one. It will be the cornerstone for a new innovative economy. The United States is still in the lead -- barely. Germany, Japan, China and India are moving up fast. Synthetic biology is on the verge of producing cheap, life-saving drugs, as well as innovative biofuels to alleviate the world's energy problem.

The obstacles are familiar ones -- policymakers and Congress with its 200-odd committees and subcommittees for 535 members of Congress. Artificial life in a lab? It's already here but well out of congressional sight.

Irrespective of the labels still pinned on U.S. President Barack Obama by his Republican opponents in private conversations -- that range from Communist to Socialist to foreign-born usurper -- potential leadership for a new America has been subsumed in crises not of his making.

Few have been as optimistic about the chances of Israeli-Palestinian peace than Marwan Muasher, a brilliant Jordanian who has held almost all the important political and diplomatic jobs his country has to offer. He dismissed skeptics year in and year out. But now he has finally conceded. The time for a two-state solution has come and gone.

Muasher now says neither side can offer what the other party needs. A new paradigm is urgently needed. The United States can't escape, he says, the fact that it needs to put its own ideas on the table for there to be a serious move to solve the conflict.

The Jordanian statesman reluctantly faces up to the Israeli bottom line. 1) The Israeli economy is doing fine; 2) the wall provides almost total separation between the Palestinians and most Israelis; 3) many Israelis don't believe the status quo is necessarily a bad thing; 4) there is no incentive or burning desire to reach a settlement.

AIPAC -- the American Israel Public Affairs Committee -- is arguably Washington's most powerful lobby, backed as it is by 100,000 of America's most influential and wealthy Jews. AIPAC is the self-appointed guardian of Israel's security. Anything it objects to won't pass muster on Capitol Hill.

Meanwhile, the construction of Israeli settlements in the West Bank has resumed as some 300,000 Jewish settlers continue to consolidate their roots. Some 200,000 in East Jerusalem, what Palestinians insist has to be their capital, continue to expand house by house.

The entire Arab world is ready to recognize Israel in its pre-1967 war borders and deal with it as normal states do with others. Israel isn't interested, which leaves the Palestinians little choice. As Muasher, the prototype of a moderate Arab, puts it, "the Palestinians can either unilaterally declare statehood (as the Israelis did in 1948), or get the U.N. to accept a Palestinian state."

While the Israeli side can live with existing conditions for several more years, Muasher says if 2011 passes without a final resolution of the conflict, the status quo won't be sustainable. A fourth intifada? "It is a clear fact that radicalism in the Arab world is on the rise (and) the gridlocked peace process is a major reason for the frustration across the region," Muasher concludes.

Frequently overlooked is this perennial conflict was -- and still is -- the principal motivation behind Osama bin Laden's al-Qaida terrorism.

The second albatross around Obama's neck is Afghanistan. The obvious solution -- short of several more years of stalemated fighting and diminished NATO involvement -- is what some influential Pakistanis whisper privately: Obama-ditches-Karzai while Omar-dumps-Osama. The latter was done years ago. Mullah Omar was already at odds with bin Laden three months before 9/11, as he made clear June 4, 2001, in the only interview he has ever given a Western reporter.

The Taliban cannot be fought or wished away. It will spend the winter rebuilding under the protection of Pakistan's Inter-Services Intelligence, not in FATA under drone surveillance and bombing, but in the relative tranquility of Quetta Shura in Baluchistan, under the watchful eye of Pakistani agents. There is no Afghan solution without Pakistan.

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