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Steps to Increasing Working Capital Theodore Cacciola
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Chapter 1:
We must first deploy intellect towards the
concept of redistribution of wealth in the United
States to confer the phases of implementation
necessary towards eliminating U.S. debt. As of
late 2011, we are around 15 trillion dollars in
debt. This short book does not quite pertain
towards the issue of a single President resolving
the issue but regulatory U.S. parliament
resolving the issue. This book outlines some of
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the necessary steps towards eliminating U.S.
debt, this is a long term commitment and this
book is based on conservative principles. It
outlines deductions rather than additions from
U.S. spending, with outlying observations,
which will promote U.S. growth towards
retaining power within the bounds of the globe.
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Chapter 2:
Does wealth really need to be redistributed or
does the United States need to re-evaluate their
fiscal policy in redistribution of wealth, clearly,
a re-evaluation is necessary based on the issue
of the debt ceiling issue of 2011. While Clinton
was in office in 2000 and 2001, the United
States underspent and there was a surplus of
tens of billions of dollars, under the Bush
administration, from 2002 through 2008 we
averaged about a $250 billion a year deficit, and
since 2009 United States debt has soared to
almost 1.5 trillion dollars per year (Carroll,
Budget 2011). Clearly our spending has hyper
inflated from the Clinton, to Bush, to Obamapresidency, and by August 2nd, without an
extension of the debt ceiling, there are a number
of possibilities for the reversal from a deficit to
a surplus. This shows how this is not a single
presidential issue, this is an issue of
deterioration of growth to deficit which
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surmises in the acquisition of highly surmounted
U.S. foreign debt.
Now onto the numbers, all of which you can
find onwww.usa.gov.We look at the numbers
and hypothesize, moreover, we analyze them to
obtain factual hypotheses which are sensually
truthful and again, factual.
The United States obtained debt of $1.5 trillion
dollars for the single year of 2010. When we
look at that figure, we can parallel that figure to
our total GDP which lied at $2.3 trillion dollars.
That means that our national debt as apercentage of our GDP is equal to 65%. In
contrast, the average country in Europe stands at
60% or less of national debt as a percentage of
GDP. We need to insure cuts, essentially, to
reduce this percentage to an insurmountable
objective quantity of 0, at the least; the objective
is to obtain a surplus on our GDP. If we were to
do this, we would be able to begin to operate on
a surplus and reverse the occurrence of the debt
ceiling crisis; certainly cuts greater than this will
only improve the United States standing on a
world scale.
http://www.usa.gov/http://www.usa.gov/http://www.usa.gov/http://www.usa.gov/ -
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Chapter 3:
We must now look at the President Elect of
2008s position within the bounds of
parliamentary debt. Agreed: with President
Obamas statement that Just as it would be a
terrible mistake to borrow against our childrens
future to pay our way today, it would be equally
wrong to neglect their future by failing to invest
in areas that will determine our economic
success in this new century (Carroll, Budget
2011), within the parameters of his election, his
electoral campaign consisted of, as the reader
knows, promises towards deficit reduction and
troop withdrawal; looking at factors which
surmount higher quantities of U.S. debt.
Health and Human Services accounted for 2.34trillion dollars of spending in 2010, followed by
the Department of Defense, at $712 billion
(http://www.gpoaccess.gov/usbudget/fy10/pdf/h
ist.pdf). Although the most egregious
spendings of the U.S. are not necessarily
deductive towards promotion of debt, they are
worth analyzation due to their high yield in the
http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf -
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parameters of total spending. We will talk more
about these procurements of high margin
spending later in this book. The point allured
bargains that large consummators of U.S.
spending are directly aligned with procurement
of U.S. debt, and must be addressed.
We must look towards profitable parliamentary
judgment to see the inflection of homegrown
debt. The accumulation of the U.S. federal
banks monetary value is due to that same
concept of taking from the rich and giving to the
poor, but the reason that Japan and Germany
have such higher savings rates is due to the fact
that they spend far less of the percentage of theirGDP compared to the United States. But what
can be done to decrease spending and increase
overall GDP?
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Chapter 4:
One necessary cut is to cut social security by
25%. Social Security looks to have operated via
a surplus but we see hypothetic inflows which
negate outflows. In other words, it would be an
example of imports negating exports. For
example, the United States imports corn, per
say, at 5 dollars while producing corn at 10
dollars. Corn producers are timid, they see
outsourced imports via pro-con cost strategies
and produce wheat instead and the aggregate
price of corn rises to 7 dollars via being
imported. This would be an example of how
inflows negate outflows.
Back to rudimentary figures, Social Security
accounted for $702 billion dollars of U.S.
spending in 2010. The question is then asked
why do we cut spending by 25%? This will cut
the yearly deficit by $175.5 billion dollars a
year. It is highly implausible to actuate the fact
that Social Security benefits max out at $50,000
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these small cuts will obtain, on a larger scale,
profitable results towards eliminating U.S. debt.
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Chapter 5:
Although by scale the U.S. has the largest
productive economy through our services
economy China has the largest production
economy, and has multiples of working capital
larger than the U.S. does. So how do we take the
steps to eliminate U.S. debt? Chinas import
taxes lie at around 9%, on average, while theUnited States Import Taxes lie barely at 1%
about 100 years ago, our import taxes lied at
around 15-20% and the United States was
considered, to say the least, an emerging market,
with heaps of working capital.
Just think of Ellis Island, we actually devoted
the closest property to the Worlds east to
importing people due to the fact of our economy
operating on such a surplus. This shows how we
had a large economy of scale, had such a
powerful economy that we needed people to
come here, in fact, five to ten thousand people
passed through
Ellis Island daily, that shows we were producing
over, in some cases, at a minimum, 300,000 jobs
a month, and that is with a world population
merely the size of what it is today. If you
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worked that out, as in if there were 300,000 jobs
in 1900, lets say, how many jobs would that be
today? Looking at the graph to the right that
would be approximately 2.1 million jobs
produced monthly.
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Chapter 6:In addition to points mentioned in the
aforementioned chapter, China, in 2009, had
6.31 trillion in tax revenue alone, while in the
same year the U.S. total, Ill say it again, total,
import income was 2.09 trillion for 2008. Chinahas an over 9% import tax, again, while the U.S.
merely taxes 1% on imports. Increasing the
income tax to the 1900 level of about 20%
would increase U.S. import revenue from 20.94
million to about half a billion dollars, that may
seem like a small increase but it is considerable
and would favorably affect U.S. debt.
Not only would it do this, but unemployment
would drop even under what is economically
called moderate unemployment, our
unemployment levels would drop to what is
considered no unemployment. That is because
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increasing tariffs or import taxes would force
foreign corporations to move their
manufacturing processes to the U.S., drastically
decreasing unemployment. If you look at the
government document stating our imports
versus our exports, our imports exceed our
exports by about 600 billion dollars, if we
increased tariffs on imports to 20%, we would
have a continuous, or exponential surplus.
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Chapter 7:
We know that there are kinks to this proposal,
but it must be done to ensure U.S. fiscal
security. President Obama calls to protect the
middle class, low class, elderly, and disabled
through his deficit reduction plan but increasing
import taxes or tariffs would have no adverse
domestic affects. In fact, it would decrease the
power of not only foreign currencies but foreign
economies as well. It will drive up prices butyou must remember that the two most important
needs for humans are food and healthcare, most
of both of those entities are produced
domestically, (only patented pharmaceuticals or
brand names are in some cases produced in
foreign markets). Increasing import taxes or
tariffs is an incredibly favorable U.S. debt
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reduction strategy and should be imposed to
promote U.S. world economic growth.
Chapter 8:
At the same time, there are things we need to
invest in; first off, we need to invest in low
income housing for the people eligible for social
security, keep food stamps available, and as perpreviously stated leave medical benefits. This
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will keep those unable to work secure and safe.
We also need to provide tax cut incentives to
corporations to encourage a reduction in
unemployment.
The next thing we need to do is first, increase
Federal loan amounts, eliminate subsidized
student loans, increase the monthly payments on
those federal loans, and; most importantly;
eliminate federal grants to students. The
increase in federal loans will offset the
elimination of federal grants and will not deter
low income families from attending college.
This cut will increase revenues through loans
and eliminate our astronomical $409 billiondollars of grants for 2010, or decrease our total
spending by $409 billion. For companies
seeking privatized grants, we need to offer
government small business loans to businesses
that display potential for job growth.
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Chapter 9:
Reducing unemployment through tax cuts will
as a result also increase total U.S. GDP; lets
say a 10% tax cut is given to every corporation
or partnership which has potential for job
growth. Only 4% of college graduates are
unemployed while the figure is much higher for
those who have not completed college. So, lets
say we give a 10% tax break to companies with
a high yield for low cost jobs like McDonalds;
given that they are ensured to create jobs, for
example.
A proposal to both decrease the unemployment
figures and increase total revenues is as follows:In 2010 McDonalds paid $1.33 billion dollars
in income taxes, if we cut their taxes by $133
million or 10% (Marketwatch.com: McDonalds
Corp), and ensured that those breaks be given
for minimum wage jobs, lets say at $8an hour,
that would create 8 thousand new jobs. This
would create 8 thousand new taxpayers, and
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remove 8 thousand people from unemployment.
Say those workers received $1,500 in welfare
or; say social security a month, but now had to
pay, say $2,000 a year in income taxes. The
U.S. would not only save the $18 thousand a
month in welfare payments, but would earn an
additional $2 thousand a month in taxes. These
8 thousand new workers would sway total
spending, for the better, by $20,000 a year, per
worker, or $160 million dollars and that is from
McDonalds alone (Minus the $133 million in
tax cuts equals $27 million a year per company),
and if we provided those cuts to every company
in the S&P 500 (or the 500 largest
corporations), this would equate to an increase
of $13.5 billion dollars a year in income. This
being only for those 500 companies, if we
provided job incentive tax breaks for each sole
proprietorship, partnership, or corporation not
listed on the S&P 500 as well, this could equate
to hundreds of thousands of new jobs and quite
plausibly $50 billion dollars a year in federal
income.
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Chapter 10:
The next thing we need to decrease is military
spending. It is commonly known that U.S.
military spending is greater than all other
nations combined. First off, we need, as we all
know, to stop policing the world. In 2010 we
spent $283 billion dollars on operation and
maintenance and $142 billion on procurement.
We need to cut procurement down to about $25
billion and cut operation and maintenance to
$100 billion; this will cut total spending by
another $300 billion dollars. We need to leave
military personnel spending the same because
military personnel are underpaid and many are
disabled post duty
(http://www.gpoaccess.gov/usbudget/fy10/pdf/h
ist.pdf).
http://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdfhttp://www.gpoaccess.gov/usbudget/fy10/pdf/hist.pdf -
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A short story told to me on how even the
military sees overspending on procurement. An
Iraq and Afghanistan war veteran once told me
that literally every week he was forced to use a
new high cost, high quality LED headlight; even
though he was just getting acquainted with his
old one. The thing we must remember about
LED headlights, is, as you may know, they lastnearly decades. Their cost is substantial military
headlights retail for about $300 each. If we take
this heroes story as fact, thats $300 a week for
every one of the 5 million members of the
military. That surmounts in 1.5 billion dollars
worth of weekly procurement. We wont use
this figure in our data analysis conclusion but
take it with a grain of salt, literally, procurement
is something which could easily be cut.
Veterans benefits and services needs to be
reduced as well, we spent $108 billion on
veterans benefits and services in 2010. This
does not need to be done by reducing each
veterans benefits but by reducing the number of
veterans who need benefits. This is
accommodated by withdrawing our troops from
highly volatile areas like Afghanistan andfocusing on political stability between nations.
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The United States needs to align itself with the
policies of the U.N. rather than the opinions of
government officials, even in times when the
fiscal power of the U.N. is indexed as intrinsic
rather than par. This will maintain U.S. peace
through parallel distinction by alliance.
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Chapter 11:
Once these cuts have been made, the U.S. will
no longer face a deficit, corresponding to these
cuts; net interest will be cut altogether from U.S.
spending, which for 2011 is projected to be over$250 billion dollars. Our total government
spending was $3.59 trillion dollars in 2010, if
you subtract the $250 billion in net interest,
$198.3 billion in Social Security (Disabled &
Elderly), $409 billion in grants, and cut $300
billion in military spending, the sum of the
values equates to $1.16 trillion dollars per year,
and that is not yet equating the possible $50
billion in revenue from the tax breaks requiring
incentive for job growth.
These factors would equate to an increase of
$1.21 trillion dollars per year U.S. money on
hand. As of September 2011, the United States
has less cash on hand than Apple, which lies in
a weak 3rdquarter technology sector looking at
yearly lows and in a position relative to the term
deficit. This would essentially link to a 19%
debt as a percentage of GDP. This would give
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the U.S. one of the best outlooks in debt as a
percentage of GDP in the world (taken that the
average nation has about 60% debt as a
percentage of GDP). Nothing but government
grants need to be cut to do this, the security of
the elderly, disabled, and poor would actually
improve due to investments in low cost housing,
and we would still stimulate private and
corporate growth. The aforementioned quote
here is by President Obama; Just as it would be
a terrible mistake to borrow against our
childrens future to pay our way today, it would
be equally wrong to neglect their future by
failing to invest in areas that will determine our
economic success in this new century (Carroll,
Budget 2011); these simple cuts would not only
take the United States out of risk of default, but
recuperate U.S. debt at a speed equal to the
speed at which this debt was taken in.
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Chapter 12:
What needs to take place is educated financialintellects need to make fiscal military decisions,
for example, instead of educated military
intellects. The same goes for several discussions
within this text. We need to make financial
intellects and financially educated individuals
make financial decisions rather than the latter.
We need tax cuts to be made, as of 2011, big
business only accounts for about 3,000 monthly
new jobs overall, we need to entice them to hire
more workers, surmounting to a larger GDP,
through fiscal incentives, this will comprise a
smaller deficit and a larger GDP. The
aforementioned text outlines the steps needed to
move U.S. parliamentary position via a deficit
per a surplus. These cuts are not harsh, they are
necessary, and no major adverse lifestyle
changes would be needed in order to remove the
United States from the negative financial
position it currently has to a positive financial
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Theodore Cacciola studied Finance andBusiness Administration at Eastern ConnecticutState University with honors, a Deans liststudent. He is the head Analyst and owner ofHamilton Financials where he providesFinancial News and Advice (*Disclaimer forAdvice) in a web-based financial advisoratmosphere. He seeks to provide the reader withwell put financial analysis. The type to whichthe reader is engaged, not offended. In his sparetime Theodore loves to play rugby, where hehas played semi-pro rugby league for theConnecticut Wildcats, is an avid snowboarder,having lived in Burlington Vermont during his
youth acting as a self-proclaimed ski-bum,and is a Category 1 Downhill Mountain Biker.