ZenPundit has published a great post which satirizes the administration's "everything's okay" approach to Mexico's deteriorating security condition. Indeed, my contact South of the Border, Goyo, speaks of incredible chaos. While he does take a little laissez faire approach to the violence, it's no doubt that the instability and political corruption are real, and could potentially have disastrous results for US security. We've talked about the oligarchy in Mexico before, as well as the perceived legitimacy of the drug cartels in Mexican society, and indeed, it's one that can pose considerable risk to the United States.
Should Mexico collapse, we need to take a look at how these failed states become terrorist havens--takfiri movements take advantage of the political instability and fill the power vacuum in the local communities. While I think it's unlikely that takfiri movements like Al Qaeda would find a home in Mexico, it's certainly plausible that other Latin American movements (Cartels, MS-13, etc) could follow the Al Qaeda model and set up shop just South of the Border. And with the US-Mexico border being as porous as the ones which divide Iran and Iraq, and Afghanistan and Pakistan, border security and stability of the Mexican nation-state is going to be one of the biggest issues in the next decade.
PS--Can I deploy to Cancun next?