steps to increasing working capital theodore cacciola

8/13/2019 Steps to Increasing Working Capital Theodore Cacciola

1/29


2/29

2Cacciola

database or retrieval system, without the priorpermission of the publisher.

Inquiries can be sent to the publisher at

[email protected]

TERMS OF USE: This is a copyrighted workand Hamilton Financials reserve all rights in andto the work. Use of this work is subject to theseterms. Except as permitted under the CopyrightAct of 1976 and the right to store and retrieveone copy of the work, you may not decompile,disassemble, reverse engineer, reproduce,modify, create derivative works based upon,

transmit, distribute, disseminate, sell, publish, orsublicense the work or any part of it withoutHamilton Financials prior consent. You may usethe work for your own noncommercial and

personal use; any other use of the work isstrictly prohibited. Your right to use this workmay be terminated if you fail to comply withthese terms.
mailto:[email protected]:[email protected]:[email protected]


3/29

3Cacciola

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


4/29

4Cacciola

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.


5/29

5Cacciola

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


6/29

6Cacciola

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/


7/29

7Cacciola


8/29

8Cacciola

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


9/29

9Cacciola

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?


10/29

10Cacciola

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


11/29


12/29

12Cacciola

these small cuts will obtain, on a larger scale,

profitable results towards eliminating U.S. debt.


13/29

13Cacciola

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


14/29

14Cacciola

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.


15/29

15Cacciola

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


16/29

16Cacciola

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.


17/29

17Cacciola

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


18/29

18Cacciola

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


19/29

19Cacciola

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.


20/29

20Cacciola

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


21/29

21Cacciola

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.


22/29

22Cacciola

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


23/29

23Cacciola

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.


24/29

24Cacciola

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.


25/29

25Cacciola

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


26/29

26Cacciola

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.


27/29

27Cacciola

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


28/29


29/29

29Cacciola

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.

steps to increasing working capital theodore cacciola

Documents