Cacciola

Copyright

2011 written by Theodore Cacciola, published via the outlet of Hamilton Financials, Inc. Fairfield, Connecticut. All Rights Reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a

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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 Obama presidency, 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 on www.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 a percentage 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.

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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 2.34 trillion 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

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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 their GDP 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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a year, working on average around $25,000 a year, while Social Security Administration offers low cost housing for $300 a month. This creates a large, unnecessary surplus for Social Security beneficiaries, this 25% cut must be made and is only proactive the adversity towards a 25% cut is limited.

In order to insure that the needy are appeased through necessity, we need to do this while keeping medical benefits for the elderly, poor, and disabled. In conjunction with these cuts, we must invest in low income housing for the people dependent on Social Security. A 25% cut for all eligible social security beneficiaries would not only retain fiscal security for the poor, elderly, and disabled, but reduce U.S. total spending.

The disability insurance trust fund also runs on a deficit of almost $15 billion dollars a year. Benefit payments must be cut by 20% to reduce the deficit. This will decrease spending by $22.8 billion dollars. As we go here, we will surmount our cuts into one large deficit reduction applicatory fiscal data analysis, you will see that

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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 the United 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. China has 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 but you 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 per previously 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 billion dollars 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 $8 an 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).

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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 last nearly 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 and focusing 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 3rd quarter 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 financial intellects 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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position which promotes growth and expands rather than detracts.

Conn Carroll, Budget 2011: http://blog.heritage.org/2010/02/05/pastdeficits-vs-obamas-deficits-in-pictures/ www.federalbudget.com http://www.gpoaccess.gov/usbudget/fy10/pdf/hi st.pdf Marketwatch.com: McDonalds Corp: September 2011.

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Theodore Cacciola studied Finance and Business Administration at Eastern Connecticut State University with honors, a Deans list student. He is the head Analyst and owner of Hamilton Financials where he provides Financial News and Advice (*Disclaimer for Advice) in a web-based financial advisor atmosphere. He seeks to provide the reader with well put financial analysis. The type to which the reader is engaged, not offended. In his spare time Theodore loves to play rugby, where he has played semi-pro rugby league for the Connecticut 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.