Republicans are counting on a quick military victory that will send the stock market soaring and restore President Bush’s aura of invincibility. Democrats are also hoping for a short war–so short that it will be forgotten by the time the 2004 presidential election approaches 18 months from now and the economy is still in the tank. Whichever scenario triumphs, the politics of Capitol Hill will be reshaped.

Until the foreign war is resolved, the domestic political armies remain in place, ready to deploy once they see how much bounce Bush gets from conquering the Iraqi Army. The experience of his father in the aftermath of a successful war drives Bush. He doesn’t want to be seen as frozen in indifference to the dormant economy. But right now he has almost no ability to attract Democrats to his economic agenda. Republicans are even balking at his proposal to eliminate dividend taxes. But the prowar wing of the GOP believes that Bush himself–along with his agenda–will be transformed by the overthrow of Saddam Hussein, a dream deferred since the senior Bush left office.

In a speech this week, Bush set out his vision of a liberated and democratic Iraq setting an example for other countries in the region. It is a seductive idea, but Bush provided no road map on how to move from inspiration to reality. “Magic realism,” says Thomas Carothers, a democracy specialist at the Carnegie Endowment for International Peace. Carothers believes democracy is possible in the region, “but not soon.” There is no organized democratic opposition to replace the autocratic rulers; the only organized opposition in these countries is Islamic and rooted in fundamentalism. An American-led invasion of Iraq will strengthen the hand of Islam, says Carothers, who just returned from the region. Governments are already planning crackdowns on free expression in the aftermath of U.S. intervention in Iraq. “The idea of an invasion bringing about democracy makes people in these countries burst out laughing,” he says.

Bush extended his fantasy of peace all the way to Jerusalem, asserting that the removal of Saddam would clear the way for peace between Israel and the Palestinians. Bush has it backwards, says Carothers. The way the administration has ignored the Arab-Israeli conflict is fueling anti-Americanism, and an invasion of Iraq will only harden the anger. Baghdad has almost nothing to do with the Palestinian uprising, and Saddam’s payments to suicide bombers are a pittance. Money is not in short supply in the Arab world; the terrorists will find another way to underwrite their actions. “The notion that invading Iraq will dry up terrorism is a pipe dream,” says Carothers.

It’s as though the inmates have taken over the asylum. Neoconservatives like Paul Wolfowitz, once consigned to the think-tank world, are now running the show. These mythic thinkers are more like missionaries bringing a taste of civilization to the unwashed than real-world policymakers. Democracy as a source of inspiration already exists in the Middle East. Many Arabs have lived in Europe and know what democracy is; they just don’t think it’s achieved with the barrel of a gun. “An Egyptian told me that if the road to democracy is 3,000 cruise missiles, an American invasion and an American military occupation, I’d rather not have it,” says Carothers.

Another example of Bush’s magic realism is the strategic missile-defense shield that he has promised to have up and running by 2004. The idea that a system can be put in place like an umbrella over America is fanciful at best, but that isn’t stopping Bush from pretending. Bush’s Star Wars has failed almost every test it’s been subjected to, succeeding only when the conditions were perfectly rigged and a single incoming missile had to be intercepted. To prevent reality from intruding on fantasy, Bush asks in his 2004 budget that Star Wars be exempted from further testing and congressional oversight because that would get in the way of its timely deployment.

Republicans are gambling that Bush will ride such a crest of approval coming out of Iraq that he can sell Congress anything. Lately he has claimed that his $670 billion tax cut earned the approval of “Blue Chip” economists, an endorsement that doesn’t even exist. He stood before the nation’s governors this week and said it was Congress’ fault that homeland security needs had been shortchanged around the nation when in reality it was the White House that rejected additional funding as “unnecessary,” even threatening a veto.

“It’s not body language; it’s not exaggeration; it’s flat-out lying,” fumed a House Democrat.

Bush’s swagger has worn thin with Republicans, as well. Ohio Sen. George Voinovich opposes Bush’s dividend-tax proposal, so the White House is sending members of its economic team into his state to build public pressure on him to support Bush. Those who know Voinovich say the move will only make him more entrenched in his opposition. What a contrast to last fall when Bush parachuted into several states represented by Democrats and helped defeat enough of them to return the Senate to Republican control. To recapture those heady days, Republicans are convinced Bush must take the road less traveled, the road through Baghdad.