Chapter 35

"First, I would like to see if we can figure out how we have come to such a predicament," stated President Lehrer, "then I would like to see if we can come to some sort of consensus as to what is needed for an ideal economy, if such a thing is possible. Once we have figured out those things, then we will try to come up with some ideas as to how we may be able to approach that. Who would like to start?"

"A large part of the problem can be traced to the massive deficits that were run up during the Reagan administration. These deficits were helpful in bringing us out of the real deep recession we had in the early eighties, but they were so large that they tripled the national debt during the Reagan years. The interest alone on the debt became the largest single part of the federal budget and it still is."

"Another thing that happened during that time was that we had an unprecedented shift of wealth from the lower and middle classes to the wealthiest members of our society. Mergers and acquisitions financed by huge amounts of borrowed capital concentrated wealth into a few hands. As companies merged, jobs were lost as the new owners tried to cut costs as much as possible. The new companies were indeed leaner, sometimes more efficient, but the amount of money that was spent on takeovers, and trying to prevent them hurt a lot of companies, taking money from needed capital expenditures and enriching the takeover artists."

"Everyone from the government to businesses to consumers went on a borrowing binge, which caused debt levels to rise to unprecedented levels. As long as the economy continued to grow, the debt levels were not considered worrisome, except for some. These people, unfortunately were considered worry warts, and for the most part were dismissed. Once the economy began to slow, businesses and consumers began to find that they were having trouble repaying their debts. Businesses began laying off workers. Workers, concerned that their jobs might not be as secure as they had thought, and apprehensive about how they would pay off their debts, cut back their spending on durable goods. This meant lower sales and profits for businesses, which responded by laying off more people. Bankruptcies began to climb. It was a vicious circle in which we still find ourselves."

"What can be done to try to break us out of this vicious circle?" asked the President.

"Markets for products will have to be reestablished, and people will have to start buying durable goods again. But the problem is that the federal government cannot take the lead on this like we have in the past because of the overwhelming debt burden that we now carry, thanks to Ronald Reagan. In the past, the government could cut taxes or increase spending to jump start the economy. But, with our debt as high as it is, if we even attempt to do something like that, we run the risk of setting off massive inflation that could rival the Weimar Republic's."

"Okay," said the President, "I think we now have a pretty good idea of how we have come to this predicament. Now, what do we need to have in order to have an ideal economy, and how do we achieve it?"

"In an ideal economy, everyone who wants a job will be able to have one."

"What else?"

"The currency would be stable, with inflation not going above three per cent and the government would be able to live within its means."

"Everyone would be able to afford the necessities of life, such as food, shelter, clothing, and medical care, as well as some other items that are not necessities, but that improve the quality of life."

"Good," said the President, as she tried to take notes left handed. "What else should we have in an ideal economy?"

"We should have a broader ownership of the means of production."

"Why not universal ownership?"

"You mean like in a communistic society? I think we've seen already that that doesn't work."

"No, I'm talking about within a capitalist structure."

"All right, let's not argue over semantics or terminology. Let's just get some ideas and we'll consider them all on their merits. What else should we have?"

"There should be much greater cooperation between management and the workers."

"How about if the workers own the companies?"

"Put it down," answered the President. "We'll discuss it later. Remember we're trying to brainstorm in order to come up with some ideas. Some may sound outrageous, but they may work. I intend to consider them all."

"There should be enough competition to keep prices under control and give businesses the incentives to come up with new ideas and new products."

"Good."

"Businesses should be given an incentive to do what is best for the public interest such as tax breaks for pollution controls and investing in high unemployment areas."

"We will have to have something built into whatever we come up with that will enable us to begin paying off the federal debt so that we will be able to regain some semblance of stability."

"The tax system will have to be set up so that it will encourage investment, but still be fair to all people in our society."

"We need to remove the concentration of wealth at the top and make it so that the middle and working classes are able to benefit from any growth we may have in the economy."

"Ideally, there won't be any need for welfare or any of those types of programs because the economic system would meet the needs of the people."

"That would have to be phased out, or else it would never meet the approval of the people because right now too many are dependent on it because of the sad state of the economy."

"What if we were to come up with a way to replace welfare with something built into the economic system?"

"What ideas do you have?"

"I'm not sure yet, but it shouldn't be charity or a handout or anything like that. It should be something built into the system so that everyone will benefit. That is something that we don't have now."

"True. But how can we do it?"

"I'm not sure, but I think having employees controlling their companies could be a place to start. They have the incentive to work hard if they want to succeed."

"What if the company, for reasons outside of their control, such as a major recession or a war, were to fail? These people would have placed all of their eggs in one basket and would be devastated financially if their company were to go under."

"Yes, also, what about those who don't have jobs? There are quite a few people out there right now who are unemployed, and it doesn't look as if many of them will be working for a while yet. This type of system would be of little help to them."

"How about a broader system where the people are able to invest in a sort of giant mutual fund that would spread the risks around among a large number of companies?"

"But how would people be able to afford it if they're not working and barely able to feed themselves? They are going to spend their money for such little luxuries of life such as food and a roof over their heads before they will be able to start making investments in a super mutual fund."

"You have a very good point there," said the President. "What other things can we come up with before we start discussing the ideas that we have in more detail?"

The brainstorming session went on for another hour before they came to a dead end. At that time, the President said, "let's take a little break, then we'll come back and start discussing what we have come up with."

Sheila King sat on the chair next to the hospital bed, gently holding Marty Lehrer's hand. Marty was now conscious, although he was still very weak. Sheila had been there with his Mother when Marty had regained consciousness and when she had told him about having been shot shortly after the White House brainstorming session. After visiting her son and daughter, the President had to get back to the White House so she could continue working on her economic plan.

Sheila began stroking Marty's forehead, quietly telling him that he would be better in no time. She then told him about his mother's offer to her to turn her plan for rebuilding abandoned houses into a workable program and of her acceptance beginning the following Monday. He rewarded her with a slight smile and a weak squeeze of her hand. With the tubes that were still in his mouth, Marty was unable to tell her how happy he was for her. After about an hour, Sheila saw that Marty was getting tired, leaned over to give him a quick kiss, and was rewarded with a smile from the stricken youth. She then got up and told him she would be back again soon to see him as she left his room. Marty then fell asleep.

No one working at the White House would get much sleep that weekend as staff members and economic advisers went from meeting to meeting trying to put together an economic package that the President would present to the nation on Sunday evening. The President had set up certain parameters that the program must have. The plan must retain the free market system, but should be set up in such a way that more people would benefit from it and would have a greater stake in seeing that the system worked. The program would have to re-establish confidence in the economic system and do so without adding significantly to the federal debt. And it had to be put together by Sunday night.

At 6:00 Sunday evening, the President sat down to eat dinner with her economic advisers and with Gary Wilson, who was trying to put the finishing touches on the speech she would deliver in three hours. By 6:30, they had finished ironing out the final details and they left it to Wilson to put it into rhetoric. Kathleen Lehrer decided to take a twenty minute cat nap to be followed by a shower before she reviewed the speech several times before her presentation.

At 8:50 she sat at her desk in the Oval Office for the final sound and light checks, resting her casted right arm beside her copy of the speech and resting her injured left leg on a small stool that was placed under her desk. She had taken two Ibuprofen tablets a few minutes earlier to ease her pain and discomfort without dulling her senses. The technicians were finished the sound and light checks within five minutes, and she just sat there meditating and trying to clear her mind, aware that the future of the country could very well rest upon not only what she said in the next few minutes, but on how she said it. She accepted the best wishes of those who were present, and took a deep cleansing breath as an authoritative voice announced, "The President of the United States."

"Good evening, my fellow Americans. I am addressing you on the evening of my tenth day as your President. So much has happened since I took the oath of office, that it seems as if it has been much longer, but it has only been a week and a half."

"So far, we have managed to keep the federal government functioning, and we have put forward proposals that will improve the way it works and will make your government more responsive to your needs. And we will continue to do so!"

"Since I have become President, we have gone to war against the tyrannical theocracy whose treachery caused the first crisis I have had to face as President. Two days later I was forced to deal with another major crisis as the government of our next door neighbor to the south, Mexico, was overthrown in a bloody revolution. Then we had the assassination attempt against me and the Racist Revolt in the Pacific Northwest."

"As you know, the new Mexican government's decision to default on their loans, followed by the defaults of Brazil, Venezuela, Argentina, Indonesia, Nigeria and Colombia led us into the crisis I will discuss with you tonight."

"The crisis we face is primarily a crisis of confidence, although we are all aware of the systemic problems that have made this crisis much worse than it otherwise would have been. For decades, our government has not been able to live within its means, with the result that our national debt is now nearly six trillion dollars. We did not build up this much debt overnight, and we are not going to solve it overnight. If we were to try to solve the debt all at once, we would plunge this country into such an economic tailspin that the Great Depression and our current economic problems would look like a garden party in comparison. That is why I oppose the current efforts to establish a Balanced Budget Amendment as part of our Constitution. If this misguided effort was to succeed, we would be in a lot more trouble than we are now and the steps we would have to take to reach that goal would be at least a hundred times more painful that what we have to do now."