The approval of the Vancouver treaty nations wasn’t news to anybody in the room, but Jed was aware of a palpable sense of relief. So wretched had the government’s finances become at one point shortly after the Battle of New York that Treasury had been forced to issue IOUs to employees and creditors. There had naturally been rampant speculation on those IOUs. Many had sold theirs off in exchange for more viable currency or food and resources. Some hoped to keep the value of the IOUs down, while others hoped for a profit if and when the government decided to honour those promissory notes at face value.
The Chief of Staff still woke up some nights with the pain in his chest, worrying about the speculative bubble. Marilyn had forced him to see a doctor in the end, so frequent had these episodes become. Apparently the federal budget deficit had been giving him killer indigestion. After the amount of vomiting he did from the acid reflux, Jed marvelled at the need to let out his trousers further and further.
‘Negotiations to roll over the line of credit at the end of its period will commence in Auckland, next week,’ McAuley was saying. ‘Both the Vice-President and I will be in attendance.’ He glanced up at Kipper at this point, as if confirming his permission to attend. Kip nodded. ‘Of course, our capacity to repay these loans by drawing on liquid assets is severely limited. We have been able to service some of the loans through barter, exchanging military surplus to our top six lenders. However, their capacity and need for such surplus is reaching an end, as is our ability to provide anything more they could want or feasibly integrate into their own militaries.’
‘I take it no one wants to buy another carrier?’ Culver asked.
‘The Brits have the one Nimitz class they want,’ Ritchie noted. ‘Frankly, it’s the only one they can afford.’
‘Continue, Paul,’ the President said, dragging them back on topic.
‘I will cover the accounts receivable first. We should start to see royalty flows from the mining leases taken up by BHP Billiton, West Rand and JCI within a six- to eight-month window, but it will still be three to four years before those companies ramp up to full production.’
Jed nodded. The United States, contrary to popular belief, still possessed vast mineral resources, especially in the form of coal. The mining corporations were required by law to hire at least forty per cent of their workforce from the local civilian population. It was dangerous, dirty work, but it paid relatively well compared to what else was available in the post-Disappearance economy.
McAuley went on. ‘The exchange of old US bonds and currency for the new Treasury bonds continues, with several major corporations and private investors buying in. They are able to exchange pre-Wave bonds for a variable face value that’s tied to their interest-rate payments. Currency exchange with overseas asset holders continues at twenty per cent face value, although there is a deadline for final exchanges set for this time next year.’
Jed suppressed a grin at the glaze he could see frosting over Kip’s eyes. He, on the other hand, found this shit fascinating. A lot of folks were getting rich off of the new bonds, deepening their credit or using the paper to levy purchases of vacant land in the Wave-affected territories. Cesky Enterprises immediately came to mind as one of the major players in that brand of rampant land speculation. The US Government would accept bonds as payment at face value for land, whereas the best a bond holder could get on the open market was less than thirty per cent for face value.
It was simple enough: buy the land on the cheap, dumping the bonds to someone else in the process, and hope that the value of the land would rise, generating a profit. Several other corporations, such as Boeing, Microsoft and Starbucks, had opened land offices with a similar objective in mind. The only problem was the same one that faced the Confederation Congress prior to the Constitutional Convention of 1787. Back then, they’d also tried to sell land in order to pay the bills, without much success. The territory, the much contested Ohio River Valley, was difficult to secure against the British and the Native Americans. This instability ensured that the land, while valuable on the surface, sold for far less than it was worth until the central government gained true control over the valley.
Funny how history could loop back and bite you on the ass like that. Spheres of control were ringed by looser rings of what might be called ‘influence’. The land in those areas did yield decent gains. However, outside of those areas? Selling that land was a lot like eating rat poison: it would fill your belly with blood while you slowly starved to death.
‘The profits from the bond and overseas currency exchange should be enough to restore short-term faith in the solvency of the government,’ Paul McAuley continued. ‘We will still be in debt, to be certain. However, the United States of America has rarely been without a national debt.’
‘The history books tell me as much, Paul,’ Kipper said. ‘Still, the blue-collar engineer in me would like to make that debt a bit more manageable.’
‘We are fortunate in the cold fact that many who received government entitlements were …’ McAuley struggled for a moment to find the right form of words.
‘We get it,’ Culver said. ‘The Republicans got their wish with social security. It went away.’
Behind the desk, his boss sighed. ‘Enough, Jed. Let him continue. Go on, Paul.’
‘Eliminating government agencies and departments which are not needed by our much reduced population will allow us to write off a great deal of the inter-agency governmental debt. This should allow us to stop the worst of the fiscal haemorrhaging and focus on servicing the foreign debt.’ Secretary McAuley shook his head as he moved on to the next point. ‘In the meantime, we remain at an impasse with Fort Hood over the issue of state taxes levied on the oil industry down in Texas, and the related issue of Governor Blackstone signing extractive leases with foreign corporations but without reference to us. Under the Federal-State Revenues Act of 2005, the Blackstone administration is supposed to remit -‘
‘Yeah, yeah, we know,’ Kipper complained. ‘Believe me, Paul, we know all about it. Bottom line - how much is Blackstone stealing?’
He wasn’t looking at the Treasury Secretary as he asked the question. He was hunched over the desk, rubbing his eyeballs, as though trying to massage away a gathering headache. Or possibly a stroke.
‘Twelve billion New American dollars in the last three quarters, Mr President.’
It was Kip’s turn to shake his head. ‘Son of a bitch. You know, we wouldn’t need a line of credit, or at least not one as big as we have, if that asshole would just play by the rules we both agreed to.’
Jed put aside the remains of the crab and avocado sandwich he’d been eating. In some ways, he thought, and not for the first time, their troubles were not that much different from the ones that faced the country when Washington became president, back in 1789. They had a huge debt, a wide-open frontier, and no shortage of foreign powers hoping for their failure. And they didn’t lack for internal strife or factionalism either.
Blackstone, Culver realised, was the difference. Even if George Washington were available to advise Kipper, he probably would’ve counselled caution. It was one thing to send an army to put down an uprising of farmers during the Whiskey Rebellion of the 1790s, quite another thing entirely to send a broken military up against a well- armed, funded and motivated separatist.
Secretary McAuley, reluctant as always to comment on a purely political matter, remained silent. Ritchie and Sarah Humboldt both looked to the Chief of Staff, as though expecting him to say something.
Jed felt like rubbing his own eyes, so tired and exasperated was he with the never-ending perdition of having to deal with Jackson Blackstone. Or rather, of having to deal with him while the President insisted on tying one hand behind his back. The best solution would be for Blackstone to fall out of his executive helicopter while touring the ruins of Dallas-Fort Worth, he thought. Newton could take care of the details.
He took a deep breath. They couldn’t get that lucky.
‘This is one of those issues we were talking about, Mr President,’ he said. ‘One of the reasons you need to go to Texas and the very reason you cannot. There is a small dark corner of my heart wherein I believe Governor Blackstone is doing this not simply to starve us of funds and destabilise this administration, but also to draw you into a political confrontation you can’t hope to win. He would love to see you down there, on your knees, begging for a handout. Or even better, on your feet, demanding he hold to the letter of the agreement. It would make him look so much stronger when he says no.’
Kipper lifted his head, but only enough to peer through the gate he’d made of his fingers. His eyes looked bloodshot and watery. The storm howled outside, raking at the brickwork of Dearborn House with claws of ice and snow. The makeshift jamb still held the window firmly in its frame. But Jed was certain he could feel freezing tendrils of sub-zero air creeping in through the less than perfect seal. He felt a sudden need to throw a few more logs into the small fireplace.
The President pulled them back on topic. ‘Admiral, you’re new to all this. Perhaps you have some fresh
