NOTE: This is part of a continuing online novel. Here is the Table of Contents.

It is with a heavy heart that I come to you during this holy Christmas season to report that my great friend, Vice President Dick Cheney, has died of a heart attack at Walter Reed Army Medical Center. I offer my condolences to his wife Lynne, to his children and his grandchildren, and I know all other Americans do so as well.

I also come to you tonight in order to report on our progress in the War on Terror, which has now taken a new, and more challenging course.

Communist China has chosen this moment of vulnerability to declare economic war on the United States. They have sold dollars in currency markets and raised the value of their currency, the Yuan, challenging our ability to finance the War on Terror.

Just as the War on Terror is a new kind of military conflict, demanding greater vigilance from every American and sacrifice in how we live our daily lives, so this new economic struggle will demand sacrifice from each of us.

We must raise the value of the dollar because, unlike the Yuan, ours is a reserve currency. Free world trade demands that the dollar be sound, and it is the commitment of this government to make it as sound as a dollar.

We have several tools with which to do this. All involve some pain. We will use all of them.

The United States can buy dollars in the international security markets, reducing their number and raising their value. We have some reserves of foreign currencies, but the most common way to buy dollars is to borrow them.

Another tool we have are short-term interest rates, which are set by the Federal Reserve. Those rates have risen already to defend the dollar, and they may have to rise more. Higher interest rates are painful for everyone, but they make the currency more valuable.

This brings me to our second area of vulnerability, the federal budget.

Just as you may find it difficult to finance major purchases when interest rates rise, the same is true for your government. It is imperative, therefore, that we reduce the budget deficit sharply.

To do that I am proposing a number of measures.

First, we should simplify our tax code, so that the rate you pay as an individual, based on your income, is the rate you pay.

There are too many deductions and loopholes, incentives for borrowing money, or for doing what you should be doing as a good citizen. We will propose to eliminate these loopholes.

This may put a few tax preparers out of work, but it will greatly simplify tax collection, and increase revenue to the treasury.

Second, we can eliminate our deficit, and move to a flatter, fairer tax system, by introducing a national sales tax.

This will be an emergency measure, the tax set at 15 cents on the dollar, in order to eliminate the deficit as quickly as possible and win this economic struggle with China. When you pay this tax, think of the poor children of Communist China, and realize that with every dollar you spend you are bringing their own day of freedom a little bit closer.

Third, we must cut spending. Some areas of the budget are off-limits. We must continue to spend on homeland security and on defense. But as to other areas we must tighten our belts.

Higher interest rates mean the cost of maintaining even our present national debt will rise sharply next year, and while we can’t eliminate that cost we can minimize it.

As our fiscal medicine takes hold, interest rates will moderate. But in the interim many popular programs, with strong political backing, will have to be eliminated. There will be a lot of pain involved for all our people.

It will take all your faith and fortitude to face down the special interests who will plead against these cuts. I may have to call on you repeatedly in the next months to demand our Congress follow through on these cuts, quickly, for the good of the nation. These cuts must be made.

We pray that the generosity of the American people, working through faith-based charities and less expensive faith-based government initiatives will be able to fill the gap.

There is a silver lining to all this.

As the dollar has fallen in value American goods have become better bargains on world markets. American farm products and manufactured goods are in high demand. We expect this higher demand will cause many new jobs to be created over the next several months and years. Old factories may re-open. New factories will be built. America is going back to work.

The work will be hard. It will take years of struggle for us to regain our competitive edge. But as Americans, with God’s help, we can do anything. And I believe you will.

Finally, returning to the sad announcement that began this talk with you tonight. It is vital to me, as your President, that I have the very closest advisor beside me as Vice President. Dick Cheney was such a man. When the Congress reconvenes, following my Second Inaugural, I will put forward the name of Karl Rove, of Virginia, to serve as my Vice President, and I expect quick action on that appointment.

God bless you, God bless your families, and God bless the United States of America.