Flashback

The old chart showed a continued 8 percent debt-growth scenario—starting in 2010—with the debt shown as percentage of GDP and based on different predictions of growth, ranging from -1 percent to a healthy (but never-achieved) +4 percent.

At that never-achieved 4 percent of growth, the national debt would have equaled the Gross Domestic Product—i.e., equaled 1.0 when debt was divided by GDP—by 2015. But of course, the economy hadn’t performed that well, and the actual ratio of debt to GDP had been closer to 1.2.

The old economist’s debt-growth scenario had shown that by 2035, even if the economy had grown 4 percent a year, the debt-to-GDP ratio would be 2.2. In truth, Leonard knew, the ratio was now more than 5.0 to 1.

The chart had ended with a prediction of debt to GDP being as low as 3.2 in 2045—if the country had actually grown that much—and as bad as 18.0 in 2045 at the -1 percent growth rate.

The United States would never reach that dismal 18-times-debt-to-gross-product ratio, Leonard knew. America had gone bankrupt years ago.

“Three other economists and I worked that chart up four years ago,” slurred the drunken old Libertarian. (Or so Leonard now suspected with some alarm.) “That’s just the goddamned debt outgrowing the goddamned GDP, just as it did in Japan, and now the dragon is here and devouring us. Understand?”

“No,” said Leonard. Although part of him did, even then.

“Here,” said the old economist and pulled up another chart.

It showed the risks of growing entitlement spending and had bar graphs demonstrating how mandatory entitlement spending—Social Security, Medicare, Medicaid, and all the hundreds of other federal programs—would exceed total government revenues sometime between 2030 and 2040.

The chart had been wrong, Leonard knew. In reality, mandated entitlement spending had exceeded total government revenues before 2022, about the time the nation was officially declared bankrupt.

“That was based on projected mandatory entitlement before Obama and the Democrats rammed through their stimulus bills and all the rest of their entitlements,” growled the old prof. “Notice that somewhere in the early twenty-thirties, our mandatory spending on entitlement programs will exceed our national GDP. By twenty-fifty, the damned interest on money borrowed to pay for entitlement programs—the old, smaller entitlement programs—will be greater than the GDP.”

“That’s ridiculous,” Leonard remembered saying. “That can’t happen.”

“It can’t?” said the old economist, breathing Scotch fumes into Leonard’s face.

“Certainly not. The president and Congress would never let it come to that.”

The old man across from him was trying to focus his gaze. “I know you. I’ve read about you. You’re hot shit in English lit. Well, tell me, Mr. E-Lit Hot Shit, where’s this country going to get the money to pay for these programs?”

“The economy will come back,” said Leonard.

“That’s what they said three years ago. And every single Wall Street recovery’s been as legless as a quadriplegic Iraq veteran. And the economy—never the same as Wall Street, you understand—is worse. Isn’t it? Isn’t it? Small businesses being taxed and bullied out of existence. Unemployment rising again. Hell, there’s a permanent unemployed class in this country again for the first time since the nineteen-thirties. Inflation returning with a vengeance, making everyone poorer by the day. Shoppers aren’t spending. Buyers aren’t buying. Banks aren’t lending. And China, who still holds most of our paper, coming apart at the seams. Their economy—their miracle eight-percent-growth-a-year economy—turned out to be a bigger sham and bubble than ours. Their ‘eight percent growth’ was a bunch of old Communists determining their economic growth by fiat ahead of time—and paying for it out of government funds—like a retail store operator counting his inventory as profit.”

Leonard hadn’t understood that at all. But he was following the news on what was happening to and in and around China. It was frightening.

“The president has a lot of smart people around him,” Leonard said, standing and getting ready to move away from the retired old fool.

“It’s too fucking late for smart people,” slurred the economist, his gaze going out of focus again. He looked at his empty Scotch glass and scowled as if he’d been robbed. “The smart people are the ones who’ve fucked up this country and the world for our grandkids, Mr. Hot Shit English Lit. Remember that.”

And, for some reason, Leonard had.

WEDNESDAY

Val didn’t come home on Tuesday night nor on Wednesday morning. A little after noon, Leonard called the LAPD to report a missing child.