When is it OK to Stop Thanking the Troops?

Those of us who completed a uniform service career are feeling pretty low now. We are wondering if the years of sleep deprivation, iffy travel, deployment, time away from family, dangerous work, and devotion to duty was really worth it. And we feel as though we are powerless to protect the futures of those still serving in uniform. We continue to try and remind the country's leaders that the contracts made to us, on behalf of a grateful nation, should not be dismissed today under the excuse that "we are under new management".

The "deal", as everyone knows it, is that if you surrender decades of your life to the service of this country, allow the needs of the service to come above your family, place yourself under a stringently austere disciplinary system where disagreeing with your boss can end in a military prison, go when you are told to go, lay your life on the line if necessary, and you survive long enough to reach your 20 year mark (the Romans established the 20 year retirement knowing many would never make it that long), THEN this nation will grant you earned benefits (deferred benefits, really) in the form of an inflation adjusted pension, healthcare coverage, and respect for your service. BUT, you cannot work more than 30 years, if you are allowed to continue that long . Many are forced to leave before 30 years, because of the needs of the service, and a small handful of senior ranks (enlisted and officer) are allowed extensions to work briefly longer than 30 years.

So what? The USA keeps its word, doesn't it?

Not necessarily. As the hot wars in Iraq and Afghanistan are winding down, sentiment in Congress appears to be changing how we treat military retirees and veterans.

Senator Tom Coburn, MD, (R, Oklahoma) proposes raising the military retiree healthcare fees over 10 times higher than currently, complaining that this pre-earned benefit (see "deal" above) is unfair. This is pretty much integrated into the “Gang of 6” initiative similar to those proposed by last year’s deficit commission. They would dramatically reduce military retirement value for new entrants, require holders of Medicare supplement policies (including TFL) to absorb an extra $3,000 per year ($6,000 per couple), and raise TRICARE fees for retired military families under 65 by up to $2,000 a year or more, and freeze military pay raises, among other things.

But wait...there's more!

Provisions in the “Cut, Cap and Balance” legislation (H.R. 2560) that was passed by the House of Representatives would allow military retirement pay to be cut up to the 21.7% shortfall in "mandatory spending" appropriations between the administration's request and the House's funding for FY 2012, up to FY 2014 when protection of military retired pay kicks in.

The Corker-McCaskill budget cap bill (S. 245) that would phase in reductions at 5% cut in FY 2013 for retired pay & earned benefits, with cuts escalating each year – to 19% by FY2021.

And the bunkers keep getting shelled as Washington huddles in response to their latest self-induced crisis. It is understood that almost any plan will likely include the voodoo economics of substituting a "revised" consumer price index (CPI) for adjusting retired military pay to correct for inflation. The new CPI is called the Chained CPI which allows the fine economists in Washington to substitute the price of...well...cat food...for the cost of hamburger, because we all know that when money is tight enough people will eat cat food before they go hungry.

All of this is comes with some in Congress demanding, "We must NOT endanger subsidies for BIG OIL."

What the Tea Party Wants

The freshmen House Republicans are widely considered to owe their office to the Tea Party movement. Funded and promoted by Wall Street for investment purposes, the party has never considered itself beholden to their benefactors. CNBC's Rick Santelli launched the movement during a broadcast lament about the interference of government in the Free Market. The movement was funded by the Koch Brothers while Rupert Murdoch's media became the movement's public standard bearer, coalescing widely disparate individuals into a "Party". Although the Tea Party is actually a composite of libertarians, anarchists (more on this), and the disenfranchised, the political stripes of the movement's benefactors lead to the natural inclusion of the group into the Republican Party as Michael Steele sought to build on the "Big Tent" strategy. (Wall Street Journal Opinion, May 2, 2009, "How Republicans Can Build a Big-Tent Party")

What the Republican Party did not know was that the Tea Party is not a group of "follower". Much of their motives for becoming political activists are antithetical to the Republican Party that has absorbed them. Today's Republican foundation is scratching its collective head and asking "What do they want?"

In a word: "Revenge"

To their credit, some of the freshmen Tea Party House Republicans do not want to be re-elected (although they will gladly keep their jobs if that is the way things work out). Their self-seen mission is to exact vengeance upon Washington, Wall Street, the majority of the United States who they disagree with, and the world.

They will work to see that the country defaults on debt and budget obligations in order to realize that revenge. Washington has always been seen by them as the "enemy". They do not want to compromise themselves and become career politicos. Wall Street, too, has "robbed" the group's labor while accruing massive profits. A financial collapse would "serve them right". The majority of US voters have long ignored the isolated libertarian views of most Tea Party members, preferring a stable society with enforced rules over the independent anarchy views of the average Tea Party adherent. Finally, their interconnection to the"world" has always been outside the understanding of the angry Tea Party philosophy. To most, there are two kinds of foreigner - those who have attacked "us" and those who want to attack "us".

What does this mean to the investor, the citizen, the President, the Republican leadership? It means "Uh oh! The kid found the loaded pistol."

10 Predictions on the "Debt Crisis"

1) The House Republicans will get their wish to have a technical default on the debt.

2) The value of your 401K will fall by 20 to 35%.

3) The "Job Creators" will keep their money while shrinking payrolls increase the unemployment rate to around 12.8% over the next year.

4) The housing market will re-freeze as home values drop another 20%.

5) Those on Social Security and military retirees will see their disbursements drop by 15% as their health fees are increased by an additional 35%.

6) About a quarter of those dollars that you paid into Social Security (they stopped sending out statements this year, so dig out your last one) will disappear over the next 5 years into a privatization programs.

7) The middle class will contract by 18% over those five years.

8) The wealth of "Job Creators" will grow, but not as quickly as the last 10 years.

9) State and local taxes will increase as local government bond rates are reset upwards.

10) Another $2 trillion will be added to the debt by increased interest over the next three years due to the default.