Donald Trump’s recognition of Jerusalem as the capital of Israel spells trouble for the Middle East, and could very well bury the already precarious situation in further turmoil— just as American citizens could be buried under a mountain of debt if his new tax plan is put in place.
Why exactly would Trump want to raise something so volatile?
Donald Trump could very well issue a statement recognizing Jerusalem as Israel’s capital this week. This could be the final nail in the coffin of the peace process. Because in doing so, he would be touching upon “the most sensitive and volatile issue” in Arab-Israeli negotiations, writes Aaron David Miller for CNN Opinion.
“Let’s be clear, the U.S. Embassy should be in West Jerusalem,” Miller writes, noting that Israel is one of the only countries in which the United States doesn’t keep its embassy in the host’s capital. “But those who argue that the United States needs to correct this problem now, whatever the cost, are thinking too narrowly — and only about Israeli interests.”
“The problem is that Israel has declared the entire city to be its eternal and undivided capital, including the eastern part of the city where many Palestinians reside and where the Palestinian Authority hopes to establish a capital once a Palestinian state is created. If Trump asserts that U.S. policy is that Jerusalem is the capital of Israel, it would be tantamount to saying that Washington now recognises Israel’s sovereignty over the entire city. If he simply says that just West Jerusalem is Israel’s capital, he risks alienating the Israeli government by suggesting that the eastern part of the city isn’t included.
“The peace process appears dead. Why bury it?”
What’s more is Trump could end up blowing up Jared Kushner’s Mideast Peacemaking in the process, argues Susan Glasser in Global Politico.
“Off stage, I spoke with several well-placed U.S., Arab and Israeli officials who told me they did not think Trump’s personal intervention this upcoming week in the Israeli-Palestinian dispute would make things any easier for Kushner,” she writes.
“Indeed, the best argument Kushner was able to muster for why this administration’s peace bid would turn out any differently was that Trump had bucked the odds before by getting elected in the first place.”
However, “Not recognising Jerusalem as Israel’s capital is a ‘farce’, (Israeli Ambassador Ron) Dermer said, characterising Trump’s likely decision to change that as sending a message to the Palestinians of: ‘Hey, wake up. Understand that Jerusalem is Israel’s capital. You have to deal with that reality’. But Arab leaders have braced for public protest, and several Middle East officials with whom I have spoken in recent days said they had not been formally consulted by Kushner and Trump on the move and worried it would backfire. ‘It sure would make things a lot harder’, one key administration supporter from the Arab world told me.”
‘Dancing on the head of snakes’
More misery lies ahead for Yemen after Ali Abdullah Saleh, Yemen’s former dictator’s death outside the capital Sana’a, which has been paralysed by a week of fighting. The former dictator had fought against the Houthis, then allied with them, only to part with them later. This turned out to be his last decision ever, reports The Economist.
“Mr Saleh commanded a network of tribal fighters. Last week he suddenly ended his three-year partnership with the Houthis. Backed by Saudi warplanes, his men captured large parts of the capital. In a televised speech on December 2nd, Mr Saleh condemned the “recklessness” of his former Houthi allies and called for a dialogue with the Saudi-led coalition. But within days he suffered a dramatic reversal. The Houthis recaptured most of the territory they lost and besieged the area around the ex-president’s home, which they later blew up. More than 120 people were killed in Sana’a over the past week, according to the Red Cross. The former president was one of them.”
“His death is an embarrassment for Saudi Arabia, particularly the young crown prince, Muhammad bin Salman, who has suffered a string of recent foreign policy failures. It will probably open a new front in the war, between the Houthis and Mr Saleh’s tribal loyalists, the latter of whom now lack a leader…But the most likely outcome is an even more splintered battlefield. Further misery lies ahead for Yemen’s 28m people, three-quarters of whom need humanitarian aid. Mr Saleh once compared ruling Yemen to ‘dancing on the heads of snakes’. In the end, even this consummate political survivor could not avoid being bitten.”
Trump’s Reagonomics
“People are going to be very, very happy. They’re going to get tremendous, tremendous tax cuts and tax relief and that is what this country needs,” Trump said recently while referring to his tax cut. But his “biggest tax cut in history” is actually a “Bizarro version of Reaganomics,” argues Rana Foroohar in The Financial Times — one that “will create a fiscal mess that America will be digging itself out of for the next 30 years.”
“Tax cuts have not created real economic growth in America in 20 years, under either Democratic or Republican administrations. Yes, we saw growth from tax cuts during the Ronald Reagan era, but we also saw a huge increase in the deficit in the second term. And the growth won’t be repeated this time around since a variety of big factors, from demographics to productivity levels, are quite different now,” she writes.
“What we will see is an increase in wealth inequality, since it is very clear that any money that large corporations (the main beneficiaries of the Republican plan) get from the cuts will go straight into stock buybacks. This will add another dose of financial glucose to what is already a very saccharine market — one that is by almost any measure totally divorced from the reality of most people’s lives.”
The real burden of debt
In fact, the tax plan could actually make matters much worse for the US, argues Neal Kimberley in South China Morning Post.
“Of course in coming months, the novelty of Washington actually managing to pass a package of tax cuts and reforms could well prompt markets to bid up US assets, including the US dollar. Fear of Missing Out could prove a powerful psychological driver for market participants.
But the lurking reality is that over the next decade it is estimated the proposed tax plan will add another US$1 trillion to the US’ national debt,” he writes.
“In truth, the fact that Congress’ tax proposals end up adding to US national debt over the next decade are really just a symptom of an underlying weakness with the package.
Seemingly, it’s just not going to kick-start the kind of upsurge in US economic growth over the next decade that would generate sufficiently higher tax revenues so that the US government can avoid higher borrowing.
The fact that Uncle Sam, meanwhile, will need to borrow even more money could well mean lenders have fewer funds to lend to the US private sector. That may adversely affect the potential for innovation and productivity gains.”