Good morning! Here’s what you need to know:
1. The International Monetary Fund says that the United States lacks a “credible strategy” to stabilise its mounting public debt. “More sizeable reductions in medium-term deficits are needed and will require broader reforms, including to social security and taxation,” the IMF said. The United States is the largest stakeholder in the IMF.
2. President Obama today is expected to endorse some aspects of the Bowles-Simpson Commission plan to reduce the deficit. The President will address “fiscal reform” this afternoon in a speech at George Washington University.
3. Robert Pear of the NYT reports: “In deciding to wade into the fight over entitlements, which he may address in (his) speech Wednesday afternoon, the president is signaling that he too believes Medicare must change to avert a potentially crippling fiscal crunch.” Medicare is fast becoming the pivotal political issue of the 2012 campaign.
4. The Washington Post reports that “President Obama faces a growing rebellion on the left as he courts independent voters and Republicans with his vision for reducing the nation’s debt by cutting government spending and restraining the costs of federal health insurance programs.”
5. Last Friday’s budget deal, which narrowly averted the partial shutdown of the federal government, reportedly called for $38.5 billion in FY 2011 budget cuts. Turns out, that’s not true. The actual number is $14.7 billion.
6. Backlash against the budget deal cut last Friday continues to build. There’s an outside chance that the enabling legislation will be defeated in the House of Representatives. Were that to happen, the Federal government would (partially) shut down.
7. Steve Pearlstein on what would happen if the debt ceiling is not raised: “However disruptive a government shutdown might have been, it would be a mild tremor compared with the global financial tsunami that would ensue if the world’s biggest and most trusted borrower were unable to repay its debts when they come due.”
8. Tom Friedman surveys the Arab Spring: “Think about the 1989 democracy wave in Europe. In Europe, virtually every state was like Germany, a homogeneous nation, except Yugoslavia. The Arab world is exactly the opposite. There, virtually every state is like Yugoslavia — except Egypt, Tunisia and Morocco.” Leadership will be needed to keep the Arab states from devolving into civil and tribal warfare.
9. In a lecture entitled “The State of White America,” author Charles Murray notes that America has long had an exceptional civic culture. “That culture is unravelling,” Murray warns. “America is coming apart at the seams. Not the seams of race or ethnicity, but of class.” Rich Lowry reports.
10. The Wall Street Journal reports: “For the first time in Mexico’s drug war, the U.S. government said its employees and citizens could be the targets of drug gangs in three Mexican states, a disclosure that could signal danger for Americans south of the border.”