Consequences for the US and Israel are equally severe though slightly different.
Israel has the problem of inadequate water. Without water, there is no food.
Israel needs fuel for electric power and also for transportation. It stands to be totally without oil in a Shiite influenced Peak Oil world.
Israel is counting on, I think, Kurdish Iraq to supply it with oil but it needs to get the fuel to Israel.
Syria would be in a position to cripple Israel under this circumstance.
Israel has another problem. Natural gas is the feedstock for nitrogen fertilizer. CH4-->Nh4-->NO3. Coal can be used in replacement, but Israel's coal fields are tapped out. (That's a joke, son.)
Without intensive fertilization, Israel needs more land just to break even. Ergo, take Lebanon. Ergo, see to it that the Lebanese die of thirst, starvation, exposure or disease.
The US has a different problem. We have enough fuel and gas to maintain our population (or perhaps 200 million of us), but not our lavish SUV lifestyle. Our economy, right now in 2006, is based on expansion of the housing market. An oil crunch causes the suburbs to be uneconomical, big box stores to be unprofitable, and major unemployment looms.
Not to worry, Homeland Security has a re-education farm camp ready for you if you lose your job and fall behind on your payments. Just kidding. At least I hope so.
From James_speaks:
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With a collapse of the housing market, and with competition from China, which holds our dollars in their savings accounts (testicles in hand, the heart and mind soon follow), the US stands to be defeated merely because we would have no economy, no money with which to import consumer goods or food, no manufacturing base to rebuild with, and no fuel to use to drive to ABC for elixor.
Basically, we are screwed. Even without upset, we are screwed. Best I can figure is that Cheney stole the election just so he and his pals could set up a system to protect themselves.
Now, if the US economic systems suffers a great decline, how will we be able to use our influence to protect Israel?
It is the potential of Iran getting a weapon which makes Israel scared simply because it means one act by Iran could ruin the Israeli dream, and the threat could make Iran invulnerable to blackmail.
From a global perspective (meaning, I would like to see life on the globe continue), an Iranian bomb is good for the US as it keeps us from doing something really stupids which could destroy us all.
There is more. Our vulnerabilities are greater than I have described, Israel's too, the evil intent of Cheney and Olmert worse than described, etc. but just the mechanics and interplay described here is a lot for one sitting.
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http://www.juancole.com/2006/08/one-ring-to-rule-them-wholesale.html