Act of War (16 page)

It was with those things in mind that Secretary Fleming had accepted the quiet assignment given to him by the President several days ago. In all honesty, he had thought the President was sending him on a wild-goose chase. The suggestion that something like what he had suggested could even exist was unthinkable before the threat by the Chinese. And while Porter might not have possessed a Ph.D. in economics, he did hold an MBA and he was an extremely intelligent man. Still, Fleming couldn’t understand how the President had come to suspect what they now knew to be true.

Fleming had been cautioned to lay things out in a manner as easy to understand as possible. Though Porter encouraged his people to ask questions when they didn’t understand something, he knew that when it came to economics, most people were in the dark and didn’t want to flaunt their ignorance. “Assume they know a lot less than you,” the President had directed him.

Keeping that directive in mind, Fleming accepted the remote from the Situation Room tech, cleared his throat, and began his presentation. “After Snow Dragon came to light, the President asked me to look into something. He was curious about the fact that the Chinese believed they would be able to land and establish permanent forces in the United States after an attack.

“What did this mean? The intelligence suggests that the Chinese are training some sort of specialized force in North Korea, but to what end? And why would they believe they would be able to put troops on American soil without any fear of international reprisal?

“The Chinese do not possess any specialty that would be uniquely
needed in the aftermath of a catastrophic event. None. This left us with only two reasonable possibilities. One, that the attack is biological in nature and that they possess some sort of immunity to the causative agent. This type of scenario is obviously outside our area of expertise at Treasury, and is being considered by other, more appropriate national security parties here in this room.

“Which brings us to the second. Is it conceivable that China could make a legitimate, legal claim to the United States after a catastrophic terrorist attack?”

“Of course they can’t,” stated the Secretary of Defense.

Fleming raised his index finger in caution. “Up until this week, I would have agreed with you.” He advanced to his first slide. “The national debt under prior administrations has been mounting at an alarming rate. “Skyrocketing” would actually be a better term. The bigger our government gets, the more money it needs to operate. In order to get that money, it has two choices. It can continue to raise taxes again and again on our citizens and risk a revolution, or it can borrow in relative quiet, out of sight of everyday Americans who don’t pay attention. The federal government has chosen to do a crippling combination of both.

“While high personal taxes leave Americans with less money to invest and spend in the marketplace, high corporate taxes leave businesses with less money to hire employees and force them to move things like manufacturing and customer service call centers offshore in order for their products to be competitive.

“We saw the last administration increase the top marginal tax rate by 5 percent. The increase pulled billions of dollars out of American households and ended up being only enough to run the federal government for six days.

“We then saw this same administration, desperate to reverse its falling poll numbers, continue to stoke the embers of class warfare. There is no more anti-American, anti-democracy rhetoric than this. To turn neighbor against neighbor because of the size of one’s pocketbook is to plow the ground and sow it with the seeds of socialism. In America, only opportunity is assured, not outcomes. Anyone who promises otherwise is acting contrary to the values upon which our Republic was founded.

“The bottom line is that the federal government was never intended to be the size that it has grown to. The Founders intended for it to remain small and for the majority of issues to be handled at the state level where citizens can be more easily involved and have their voices heard.

“But as the federal government has expanded, it has become its own living, breathing organism. You have all heard the President liken it to Jabba the Hutt from the
Star Wars
movies, sitting on his throne gorging himself all day and dispatching his henchmen whenever his existence is threatened. This is exactly what the federal government has become. It is like a giant octopus with razor-sharp tentacles, which lashes out whenever it feels threatened. We have seen the IRS, the NSA, the Attorney General’s office, and countless other federal departments and bureaucracies weaponized and turned against the American people.

“Anyone with the temerity to suggest that the government be scaled back becomes an enemy of the state, targeted not only by its aforementioned tentacles but by a complicit, big-government media. It is worse than Louis XIV’s claim
L’état, c’est moi
. It is no longer one person, but the entire government declaring that the state takes precedence over the individual. It has devolved into
L’état, c’est l’état soi-même.

“Imagine a family that is completely out of money but that keeps signing up for more credit cards. It doesn’t scale back its lifestyle but actually takes it to the next level, buying more expensive cars, summer homes, and luxury vacations abroad. It’s a recipe for complete and unmitigated disaster. Yet damning the torpedoes, the government proceeds full speed ahead.

“And as it does, as the government continues to tax and grow and borrow and spend, the day of reckoning draws ever closer. The bill is already overdue and at some point, we will no longer be able to borrow the money we have been using to put off the inevitable. Simply put, our national debt is growing faster than we can pay for it. The laws of physics and economics are inescapable. No nation can keep spending money it doesn’t have forever. But spend we do.

“The prior administration tripled the deficit and increased the national debt by over seventy-five percent. Within the next ten years, every penny from taxes will go just to covering the interest on our debt. We’ll
have to borrow money for
everything
else. Military spending, Homeland Security, you name it. And knowing this, who would be stupid enough to loan us any money?” Fleming asked as he advanced to his next slide. “This is where President Porter’s thoughts come in.

“Forty percent of our national debt is held by the federal government and the Federal Reserve. Essentially we print money and move it from our left pocket to our right. The largest foreign holder of American debt, though, is China.”

“Despite everything you’ve said,” the Secretary of Defense interrupted, “that still doesn’t mean that they can come in here and declare themselves owners of the United States.”

“Again, a week ago, I would have agreed with you, but hear me out,” Fleming replied as he went to the next slide. “In the 1990s, Mexico had a currency crisis, which the United States stepped in to help resolve. We propped up the peso with an influx of $20 billion. It was the largest non-military international loan the U.S. had made since the Marshall Plan.

“There was a rumor that circulated at the time that the loan almost didn’t happen. Some were very concerned that the Mexicans wouldn’t be able to pay it back. Others were less concerned with whether the loan would be paid back than with what would happen if the Mexican economy completely collapsed. Would our southern border be overrun with economic refugees? Congress was dead set against the loan.

“A small D.C. think tank aligned with the administration at that time made a radical suggestion. Have Mexico collateralize the loan by putting up the Baja Peninsula. If Mexico defaulted, Baja would belong to the U.S. and become the fifty-first state. That idea was allegedly discussed and dismissed as ‘too crazy.’ The think tank then recommended Mexico secure the loans with oil and natural gas drilling leases. That idea was also dismissed. The administration was worried they could end up looking like they had taken advantage of ‘poor little Mexico.’

“In the end, the then Secretary of the Treasury skirted Congress by tapping a Treasury Department emergency reserve fund and got the money to Mexico that way. The idea, though, of nations backing up their loans with something tangible had been planted.”

Fleming clicked his remote and a new slide appeared. “I know the
President doesn’t like to blame the previous administration. We’ve all been told we have to play the hand we’ve been dealt as well as we can for the American people. But, it is important to note that the Congressional Budget Office warned the last administration that the nation’s debt was unsustainable and their spending policies were presenting lawmakers and the public with difficult choices.

“They were told that if nothing was done, entitlement spending would double, the government would have less flexibility to respond to unexpected challenges such as economic downturns or wars, and the risk of another financial crisis was being greatly increased. All of these, they were warned, would cause America’s lenders to demand super-high interest rates in order to continue financing our government’s borrowing binge.

“The CBO’s warning wasn’t top secret. It was very public. Not only were the markets listening, but so were the Chinese. They knew that it didn’t matter much who sat in the Oval Office. The United States government was a life-form committed wholly to itself. It would continue to borrow, spend, and grow. It would die of obesity before ever agreeing to be slimmed down to a manageable size.

“The previous administration used the Federal Reserve to keep interest rates artificially low so it could continue to borrow money, but the Chinese were not only wise to it, but also growing increasingly tired of this game. Apparently, they got to the point where they were no longer content to play along.”

The Secretary of State looked at Fleming and asked, “What do you mean,
apparently
?”

“Your predecessor said it best. ‘Our debt and deficits are unsustainable and will cause us to not only lose our influence, but prevent us from making the right decisions.’ He was right and that is exactly what has happened.

“China stopped listening to us about their human rights violations, international partners no longer wanted to line up with us to take on threats like Syria, Iran, or North Korea, and country after country, including China, has been bucking to dump the dollar as the world’s reserve currency.

“In short, much of the world no longer respects us, China in particular. In order to continue to loan us money, they began to demand a new premium, one more reflective of the risk they were taking.”

“What kind of premium?”

“They wanted their loans backed up with more than just the full faith and credit of the United States government. They wanted the loans to be collateralized.”

“With what?”

Fleming went rapidly through a series of slides. “Everything. Oil and gas leases in Alaska and the Gulf of Mexico. Mining rights throughout the Rockies and the Mountain West. Timber. Farmland. Water rights. Shipping ports. National parks. For every loan we rolled over or issued anew, the Chinese demanded a concession.”

“And the last administration gave in to this?”

Fleming nodded.

“Without congressional approval?” the Secretary of State, a former senator, asked incredulously.

“The bigger the government, the less the respect for the rule of law.”

The Secretary of Defense jumped in to chastise the Secretary of State and former senator. “All that administration did was end-run Congress. The warning signs were there and plenty of people were screaming for you and your colleagues to do something. You and your pals, though, didn’t want to ‘alienate voters.’ You all said, ‘We’ll fix it later’; that it had to begin at the ballot box. Well, here we are. Thanks a lot.”

Normally, the President would have short-circuited this kind of pissing match, but all of it needed to be said. The Secretary of State was a good peacemaker, but peacemaking had its place and its price. Turning a blind eye to abuses of office when he was a senator wasn’t making peace. It was capitulation.

“How is it even possible that this is the first time I am hearing about this?” the Secretary of State demanded.

Fleming looked at the FBI Director, who had been assisting him over the past week. Pulling a file from the folder in front of him, the FBI Director said, “There had been a whistleblower at Treasury. She was apparently ready to name names and went to a congresswoman she thought
would be sympathetic. The congresswoman was sympathetic all right, to the last administration. She ended up ratting her out in exchange for a bunch of special items she wanted the President to approve through executive order.

“The President’s people then went after the whistleblower with a vengeance. It’s not hyperbole to say they turned her life into a living hell. She was not a perfect woman by any means and they used everything they could against her. She has a handicapped son and they pulled the trump card. They threatened her pension and medical benefits. She folded on the spot.”

The Secretary of State was irate. “I want to know who the congresswoman was and I want to know who on the President’s staff was involved. This will not stand.”

Now it was time for the President to get involved. Raising his hand he said, “We’ll get to all of that, but now is not the time.”

The Secretary of State backed down and Secretary Fleming reclaimed the floor. “During the congresswoman’s reelection, the whistleblower approached her challenger and gave his campaign the full story. It was a very serious claim, which the campaign couldn’t prove. Plus, she told them they couldn’t use her name, so they didn’t go public with it. They did, though, pass it along to the FBI. But when agents approached her, she denied she had made any of the claims.”

“Why? Is she some sort of loon?” asked the Secretary of State.

“No, it was still under the previous administration and she was afraid they would come after her again. But with the new presidency, she’s had a change of heart.