"Not One Single Dime"

Today Congress is debating whether the Bush Tax Cuts should expire or be renewed. The fact that this is being debated at all amazes me. The worst thing you can do during a recession is raise taxes. Everyone knows that; even the most uneducated among us.

The second worst thing you can do is try to spend your way out of a recession. But of course we know the Obama Administration has already attempted that. And, as expected, it has failed miserably regardless of what the President and Mr. Geithner are saying at every opportunity.

During the Presidential campaign in Dover, New Hampshire on September 12, 2008, then candidate Obama stated the following:

"I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.... You will not see any of your taxes increase one single dime."

This sounds strikingly similar to George Bush’s claim in 1988: “Read my lips, no new taxes.” We all know he broke that promise. We all know he failed to get reelected. Hopefully, the same will happen here. When Obama allows the George W. Bush tax cuts to expire on December 31, 2010, it should be the final nail in the coffin for hope and change. All of us who are hoping for change may now actually get what we want.

It should also be noted for the record that President Obama has already broken this promise once before. The Health Care Reform Act contains a number of tax increases that originally were called penalties. After much chagrin, the Obama Administration finally had to admit these were taxes not penalties. Since that has been opined upon to death by commentators, I will not dwell on it here. Just suffice it to say he has already increased taxes on the lower and middle classes.

This article is primarily about the Bush tax cuts. And if they are allowed to expire, beginning in 2011, your taxes will increase by much more than one single dime as Obama stated. The raise will be much, much greater. Here's why:

Ryan Ellis wrote an article published July 1, 2010 on a website called Americans for Tax Reform. Mr. Ellis goes into some detail regarding what lays ahead if Obama and the Democrats get their way and allow the tax increase which, by the way, will be the largest tax increase in American history. Voters should arm themselves with this information now in order to make intelligent choices in the voting booth in November. By the way, it may not help regardless of who gets elected in November because a lame duck Democratic Congress with an angry Leftist President may be the most dangerous thing this country has ever seen. Beware mid-November through January!

Here are some facts on the tax increase scheduled for January 1, 2010:

• Personal income tax rates will rise...

- The 10% bracket will rise to 15%

- The 25% bracket will rise to 28%

- The 28% bracket will rise to 31%

- The 33% bracket will rise to 36%

- The 35% bracket will rise to 39.6%

• The child tax credit will be cut in half from $1000 to $500 per child.

• The standard deduction will no longer be doubled for married couples relative to the single level thereby bringing back the so called marriage penalty.

• The dependent care and adoption credits will be cut.

• There will be a 55 percent top death tax rate on estates over $1 million. (If this is allowed to happen, then George Steinbrenner saved his heirs almost half a billion dollars by dying this year).

• The capital gains tax will rise from 15 percent to 20 percent.

• The marginal rate on dividends will rise from 15 percent to 39.6 percent

• Health savings (HSA) and flexible spending accounts (FSA) can no longer be used to purchase non-prescription, over-the-counter medicines.

• A $2,500 cap on flexible spending accounts FSAs will be added.

• Tax on non-medical early withdrawals from an HSA will double to 20 percent.

• Small businesses will no longer be able to expense up to $250,000 in capital purchases. Instead, the allowance will be reduced by 90% to only $25,000.

• Large business will have their expense deductions slashed by 50%.

• The “research and experimentation" tax credit will be eliminated,

• The deduction for tuition and fees will be eliminated.

• Teachers will no longer be able to deduct classroom expenses.

• The student loan interest deduction will be eliminated.

• Charitable contributions from IRAs will be eliminated. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.

To make matters worse, the Alternative Minimum Tax (AMT) will now be levied on at least 28 million families. That's a seven-fold increase from last year when it was levied on 4 million. This “AMT” disallows many deductions and exemptions such as state and local income, sales tax, property tax, accelerated depreciation, medical expenses and other tax preference items such as Intangible Drilling Costs. Instead, it sets a minimum tax rate of either 26% or 28%.

And because the AMT is not indexed to inflation, the number of households affected by this tax will dramatically increase over time. This was predicted by the Congressional Budget Office way back on April 15th, 2004, when it issued this statement:

"Over the coming decade, a growing number of taxpayers will become liable for the AMT. In 2010, if nothing is changed, one in five taxpayers will have AMT liability and nearly every married taxpayer with income between $100,000 and $500,000 will owe the alternative tax."

In short, the AMT disallows deductions otherwise available under standard IRS rules, and is based upon a very complex set of criterions.

If these changes are allowed to happen, it will be disastrous for the economy. Small business will be stymied. Spending by private business will be substantially lowered or cease completely. What does that mean? Unemployment will go up. We will not only have a double dip recession, we will probably have an economy worse than that of the Great Depression.

Right now, every economic indicator shows that the economy is barely holding onto the ledge. Anything that would cause investors and/or private sector business owners to stop spending may be the straw that breaks the camel’s back. These tax increases contain a number of such straws.

For example, if you raise the Capital Gains and Dividend Tax Rate, you will be directly hitting investment. Investment is what drives the economy. For every dollar an investor pays in taxes, it is one potential dollar that will not be used to finance another company or to increase capital expenditures in an existing company. It also makes less dollars available to hire another few employees should the need arise. It also takes the incentive away to make more money. Remember the Lauffer Curve whether you agree with it or not.

The same is true if you increase the write-off period on big ticket items. If a company is permitted to expense $250,000 in capital expenditures each year, it may be more inclined to make purchases of big-ticket items than if it can only expense $25,000 per year. Anything over $25,000 would now have to be capitalized and charged off over a number of years. Private sector business will no longer make those purchases or they will decrease dramatically. Look at what happened after the Homebuyer Credit and Cash for Clunkers ended. It would be the same thing. Jobs will be lost and/or not created.

Middle Class homes will not make additional purchases as well. If you cause an average family to pay an additional 5% in taxes, that is 5% less discretionary income to keep the economy moving. Plus, if people lose faith in the economy, more money goes into savings which is also dangerous because money saved is not money spent. Personal savings rates are already up so this is already happening.

In addition, we are on the verge of a deflationary spiral which is considered a disaster to an economy in the sense the people do not tend to spend money when they think prices are going down because they are waiting for price decreases. Manufactures, then lower prices to stimulate purchases. This does not work because every price decrease is met with more expectations on the buyers for more price decreases. The last time this happened in the United States was in the 1930’s. We have now had three straight months of decreases in the Consumer Price Index. At what point are we officially in such a spiral?

When you couple the tax increases set for January, 2010 with the possibility of deflation, we are on the precipice of a disaster the likes of which this country has never seen. Also, by the way, does the printing of fiat money in the manner that the government has in the past 18 months scare anyone? Shouldn’t we be in the midst of the greatest inflation this country has ever seen? This is a doomsday scenario waiting to happen.

In closing, it is my opinion that this tax increase cannot be permitted. It is not the way to close the budget gap. Congress must find other ways to do so. They cannot rely on more taxes. They must limit the size of government by necessity even if that is not what they want. Governor Schwarzenegger has had to do it in California and it has made him extremely unpopular. Sometimes the tough decisions are the necessary ones.

Congress must reign in spending. Keep the tax cuts in place for another 4-5 years or make them permanent. Give the economy a chance to cycle its way out of this depression. Do not make it any worse.

Maybe we can start by eliminating some government programs. Maybe the Department of Energy which has proved useless should cease to exist? Maybe the Health Care bill should be left unfunded? There are many other ways to curb the spending even to the extent of privatizing the Post Office.

A tax increase to allow uncontrolled spending to continue is not the answer, especially in light of the fact that President Obama will be breaking one his most solemn campaign promises. Of course with him that does not seem to be an issue. He is breaking promises ever day he is in office. Maybe that is why his approval rating currently stands at about forty-three percent.

© 2010 by Craig Covello and Frank DeMartini. Used with permission. All rights reserved.

General Stanley McChrystal's Retirement Remarks on July 23, 2010 at Fort McNair, Washington D.C.

This is frustrating. I spent a career waiting to give a retirement speech and lie about what a great soldier I was. Then people show up who were actually there. It proves what Doug Brown taught me long ago; nothing ruins a good war story like an eyewitness.

To show you how bad it is, I can't even tell you I was the best player in my little league because the kid who was the best player is here tonight. In case you're looking around, he's not a kid anymore.

But to those here tonight who feel the need to contradict my memories with the truth, remember I was there too. I have stories on all of you, photos on many, and I know a Rolling Stone reporter. (Laughter.) (Applause.)

Look, this has the potential to be an awkward or even a sad occasion. With my resignation, I left a mission I feel strongly about. I ended a career I loved that began over 38 years ago. And I left unfulfilled commitments I made to many comrades in the fight, commitments I hold sacred.

My service did not end as I would have wished, and there are misperceptions about the loyalty and service of some dedicated professionals that will likely take some time but I believe will be corrected.

Still, Annie and I aren't approaching the future with sadness but with hope and iPhones. And my feelings for more than 34 years I spent as an Army officer are a combination of surprise that any experience could have been as rich and fulfilling as mine was and gratitude for the comrades and friends we were blessed with.

That's what I feel. And if I fail to communicate that effectively tonight, I'll simply remind you that Secretary Gates once told me I was a modern Patton of strategic communications. (Laughter.) Fair point.

So if we laugh tonight, it doesn't mean all these years have not been important to me. It means the opposite; that every day and every friend were gifts I treasure and I need to celebrate.

But first, I need to address two questions that we've been asked often lately. The first is: What are you going to do? Actually, Annie is the one who's asking me that. I'm thinking I'd be a good fashion consultant and spokesman for Gucci -- (laughter) -- but they haven't called.

The other question is always asked a bit tentatively. How are you and Annie doing? We did spend some years apart, but we're doing well. And I am carrying some of what I learned into retirement.

First, Annie and I are reconnecting. And now, we're up on Skype with each other. Of course, we never did that all the years I was 10,000 miles away, but now we can connect by video link when we're 15 feet apart. And I think she really likes that. (Laughter.)

I was so enthused I tried using Skype for a daily family VTC -- (laughter) -- where I could get updates and pass out guidance, but there's some resistance to flatter and faster in the McChrystal household.

The same is true for the tactical directive I issued soon after my return. It's reasonable guidance: One meal a day, early-morning PT, the basics of a good family life. (Laughter.)

But I've gotten a few night letters, and Annie's stocking up on ammonium nitrate fertilizer -- (laughter) -- which is strange since our new yard is smaller than this podium.

Although the insurgency is relatively small -- one woman -- she's uninterested in reintegration. (Laughter.)

I assess the situation as serious and, in many ways, deteriorating. (Laughter.)

Mr. Secretary, look at her. I'm thinking at least 40,000 troops. (Laughter.) (Applause.)

Let me thank everyone for being here. This turnout is truly humbling. Here tonight are my wife and son, my four brothers, two nephews, mentors, comrades from countless phases of my career, and some special guests whose service and sacrifice are impossible to describe with words.

But because this crowd is pretty big, for good order and discipline, I've divided you all into four groups. Please remember your group number. (Laughter.)

Group 1 are all the people who accepted responsibility for making this ceremony work from the planners to the soldiers on the field. My apologies for all the time you spend in the heat. You're special people. And in my mind, you also represent soldiers all over the world. You have my sincere appreciation.

The second group -- (applause). The second group is distinguished servants of all nations who have taken time from your often-crushing schedules to be here. And thanks for your years of support and friendship. I got you out of the office early on Friday.

Group 3 are warriors of all ranks, and that includes many who don't wear a uniform but defend our nation with whom I have shared aircraft, VTCs, remote outposts, frustrations, triumphs, laughs and a common cause for many years. You are not all here. Some of you are deployed and in the fight. Others rest across river in Arlington. Most of the credit I've received actually belongs to you. It has been your comradeship that I have considered the greatest honor of my career.

Finally, Group 4 is all those who've heard we're having two kegs of beer in the backyard after my ceremony. This group includes a number of my classmates from West Point, old friends, most of the warriors from Group 3, and some others who defy accurate description. Anyone already carrying a plastic cup might be considered the vanguard of Group 4. (Laughter.) Everyone here today is invited to join.

To Secretary Gates, I want to express my personal thanks, certainly, for your generous remarks but more for your wisdom and leadership which I experienced firsthand in each of my last three jobs. Your contribution to the nation and to the force is nothing short of historic.

Similarly, I want to thank the many leaders, civilian and military, of our nation beginning with President Obama for whom and with whom I was honored to serve. Whether elected, appointed or commissioned, the common denominator of selfless service has been inspiring.

As COM ISAF, I was provided a unique opportunity to serve alongside the professionals of 46 nations under the leadership of NATO. We were stronger for the diversity of our force, and I'm better for the experience.

My thanks, also, to the leadership and people of Afghanistan for their partnership, hospitality and friendship. For those who are tempted to simplify their view of Afghanistan and focus on the challenges ahead, I counter with my belief that Afghans have courage, strength and resiliency that will prove equal to the task.

My career included some amazing moments and memories, but it is the people I'll remember. It was always about the people. It was about the soldiers who are well-trained but, at the end of the day, act out of faith in their leaders and each other; about the young sergeants who emerge from the ranks with strength, discipline, commitment and courage.

As I grew older, the soldiers and sergeants of my youth grew older as well. They became the old sergeants, long-service professionals whose wisdom and incredible sense of responsibility for the mission and for our soldiers is extraordinary.

And the sergeants major -- they were a national treasure. They mold and maintain the force and leaders like me. They have been my comrade, confidante, constructive critic, mentor and best friend.

A little more than a year ago on a single e-mail, Command Sergeant Major Mike Hall came out of retirement, leaving a job, his son and his amazing wife Brenda to join me in Afghanistan. To Mike, I could never express my thanks. To Brenda, I know after all these years, I owe you. I also love you.

To true professionals like Sergeants Major Rudy Valentine, Jody Nacy, Steve Cuffie, CW Thompson, Chris Craven, Jeff Mellinger and Chris Farris, your presence here today is proof that, when something is truly important, like this ceremony, you're on hand to make sure I don't screw it up.

I've been blessed with the presence of old friends throughout my career, friendships that began long ago at West Point, Forts Benning, Bragg, Lewis or countless other locations and shared years of Army life, moving vans, kids, laughs, disappointments, and each other's successes which grew into bonds that became critical on the battlefield.

I treasure a note I received during a particularly tough time in Afghanistan in 2007 from fellow commander, Dave Rodriguez, that quoted Sherman's confidence that, if he ever needed support, he knew his friend Grant would come to his aid if alive. Serving with people who say and mean such words is extraordinary.

I served with many. Many of you are here tonight. And not all the heroes are comrades are in uniform. In the back of a darkened helicopter over Kunar, Afghanistan, in 2004, a comrade in blue jeans whose friendship I cherish to this day passed me a note. Scribbled on a page torn from a pocket notebook, the note said, "I don't know the Ranger Creed, but you can count on me to always be there." He lived up to his promise many times over.

To have shared so much with and been so dependent on people of such courage, physical and moral, integrity and selflessness taught me to believe.

Annie's here tonight. No doubt she walked the 50 feet from our front door in cute little Italian shoes of which we have an extensive collection. (Laughter.) In Afghanistan, I once considered using Annie's shoe purchases as an argument to get Italy to send additional forces. (Laughter.) But truth be known, I have no control over that part of the McChrystal economy. (Laughter.)

But she's here like she's always been there when it mattered. Always gorgeous. For three and a half years, she was my girlfriend then fiancée and, for over 33 years, she's been my wife.

For many years, I've joked, sometimes publicly, about her lousy cooking, terrifying closets, demolition derby driving and addiction to M&M candy, which is all true. But as we conclude a career together, it's important for you to know she was there.

She was there when my father commissioned me a second lieutenant of infantry and was waiting some months later when I emerged from Ranger School. Together, we moved all we owned in my used Chevrolet Vega to our first apartment at Fort Bragg. The move, with our first days in our $180-a-month apartment, was the only honeymoon I was able to give her, a fact she has mentioned a few times since.

Annie always knew what to do. She was gracious when she answered the door at midnight in her nightgown to fight Sergeant Emo Holtz, a huge mortarman, carrying a grocery bag of cheap liquor for a platoon party I'd hastily coordinated that evening and not told Annie about following a Friday night jump. I got home not long after to find Annie making food for assembling paratroopers. Intuitively, Annie knew what was right and quietly did it.

With 9/11, she saw us off to war and patiently supported the families of our fallen with stoic grace. As the years passed and the fight grew ever more difficult and deadly, Annie's quiet courage gave me strength I would never otherwise have found.

It's an axiom in the Army that soldiers write the checks but families pay the bills. And war increases both the accuracy of that statement and the cost families pay.

In a novel based on history, Steven Pressfield captured poignantly just how important families were and, I believe, are today. Facing an invading Persian army under King Xerxes, a coalition of Greek states sent a small force to buy time by defending the pass at Thermopylae and were led by 300 special, selected Spartans. The mission was desperate and death for the 300 certain.

Before he left to lead them, the Spartan king, Leonidas, explained to one of the Spartan wives how he had selected the 300 from an entire army famed for its professionalism, courage and dedication to duty.

"I chose them not for their valor, lady, but for that of their women. Greece stands now upon her most perilous hour. If she saves herself, it will not be at the gates. Death alone awaits us and our allies there but later in battles yet to come by land and sea.

"Then Greece, if the gods will it, will preserve herself. Do you understand this, lady? Well, now, listen, when the battle is over, when the 300 have gone to death, then all Greece will look to the Spartans to see how they bear it. But who, lady, will the Spartans look to? To you. To you and the other wives and mothers, sisters and daughters of the fallen.

"If they behold your hearts riven and broken with grief, they too will break and Greece will break with them. But if you bear up, dry eyed, not alone enduring your loss but seizing it with contempt for its agony and embracing it as the honor that it is in truth, then Sparta will stand and all Greece will stand behind her.

"Why have I nominated you, lady, to bear up beneath this most terrible of trials, you and your sisters of the 300? Because you can."

To all who wear no uniform but give so much, sacrifice so willingly and serve as such an example to our nation and each other, my thanks.

As I leave the Army, to those with responsibility to carry on, I'd say, service in this business is tough and often dangerous. It extracts a price for participation, and that price can be high.

It is tempting to protect yourself from the personal or professional costs of loss by limiting how much you commit, how much of belief and trust in people, and how deeply you care. Caution and cynicism are safe, but soldiers don't want to follow cautious cynics. They follow leaders who believe enough to risk failure or disappointment for a worthy cause.

If I had it to do over again, I'd do some things in my career differently but not many. I believed in people, and I still believe in them. I trusted and I still trust. I cared and I still care. I wouldn't have had it any other way.

Winston Churchill said we make a living by what we get, but we make a life by what we give. To the young leaders of today and tomorrow, it's a great life. Thank you. (Applause.)

Excluded Middle by Michael Cochrane

The Constitution of the United States is such a fundamental and influential document that it is completely understandable that it would be the center of attention and controversy with respect to the nature of what we believe to be true and significant as a people. As such, the Constitution is subject to a scrutiny that suggests that its propositions and proscriptions are open to interpretation.

Over the last two centuries, there has arisen a concept of political ideology that appears to dispose itself along a spectrum from extreme to extreme – extreme right (facism) to extreme left (communism). Well meaning people from both “extremes” have attempted to make their case for the truth of their position. The so-called “moderate” individual might “split the difference”, and find a middle position that seems to be reasonable and truthful at the same time.

Thus, a common response to the daily back and forth of views on the left and the right is to think that the “Truth” lies somewhere in the “reasonable” middle; the centrist viewpoint. Such a position is considered unassailable and more than likely where the real answers to problems lie. That mode of thinking may pass the test of political correctness, but it doesn’t pass the test of philosophical scrutiny.

The Truth lies where it is – objectively – regardless of where we are positioned on the spectrum of political or ideological views. I’m reminded of the concept of statistical sampling: The mean of the population is a parameter one can never know exactly, but it is “true”. We take a random sample of that population and derive the statistic, the sample mean, which is an estimate of the “true” population mean. From there we can build a 95% confidence interval for the location of this true value. But this interval may or may not enclose the true population parameter. All this tells us is that if we were to construct 100 intervals from 100 random samples, that 95 of them would enclose the “true” population mean. It’s possible (with a 5% chance) that we’re wrong.

Therefore a search for Truth should not be driven to the center from the “extremes”; it should be undertaken objectively, without regard for what society deems far right or left. The Founders, in their wisdom, created a document that attempted to derive a basic set of laws for the nation based on the objectively true principles of liberty and justice as authored by God. But, since it is a creature of man, the Constitution is not perfect. So it allows for amendment. Even the Declaration suggests that a free people reserve the right to overthrow a government destructive of those basic God given rights and start over.

The notion of a “living” Constitution suggests to me that it is possible to ascribe more or less (or different) power and authority to the words of the document based on the exigencies of a particular societal problem. To return to my statistics analogy, this is like constructing a 100% confidence interval: we fit the “Truth” to a space between the extremes we have settled on. The problem with this is that there is no such thing as a 100% confidence interval (unless, of course, your “sample” is the entire population, in which case you would *know* the truth because you had perfect information).

Truth exists. It may actually lie outside the boundaries with which human beings have constrained it. The truly virtuous person will pursue it wherever it may lead, and will not be constrained by boundaries imposed by a fickle society.

Copyright 2010 by Michael Cochrane.  Used with permission.  All rights reserved