The Return of Elliott Eastman Read Online Free PDF Page B

term,” Elliott suggested.
    Paul smiled. “A third term? You’re a better salesman than I gave you credit for. I got your message … something about ‘problem solved.’ Intriguing to say the least. Talk to me.”
    “I know you’re pressed for time. Here are the ideas in a nutshell. We cannot grow, cut or tax our way out of our debt issues. We are facing the same fate that Greece, Spain, Italy, Portugal and Ireland suffered a few years ago. We need a new income stream. It’s the only answer. I’ve had some of my people do the math. There are approximately 985 million trades each day on various US stock exchanges and two sides, buyer and seller, to each trade. By the way, that 985 million is tapes A, B, and C. The Nasdaq, the New York and the Euronext exchanges. It doesn’t include commodities, futures or derivatives contracts. In any event, tapes A, B, and C reflect approximately 1.8 billion trades. We should place a nominal fee; a flat fee so easy to understand even a child could grasp it, on each trade. Say ten dollars on trades over one thousand, one hundred dollars on trades over one hundred thousand and one thousand dollars on trades over one million. We calculate that this will generate in the range of forty million dollars a day, or two hundred billion a year on the stock trades alone. If we throw in a similar fee structure on the commodities, futures and derivative contracts, you know, the more exotic financial instruments this could generate another trillion a year in fees. I’ll give you a little background. The derivatives market back in 1997 was $17 trillion a year. In 2005 it was $125 trillion, whereas today it is estimated to be $703 trillion a year. To put that into perspective, it’s about forty times the Gross National Product of the entire country. Also, the gentlemen that run some of these hedge funds earn quite a bit.” Elliott paused flipping through his notes. “Jean Simmons of Renaissance Technologies earned 2.5 billion dollars last year and David Tepperson of Appaloosa Management made over 4 billion, so it would seem this is a very lucrative business. I would suggest even a modest fee on these transactions would generate something in the neighborhood of $1.5 trillion dollars a year. We’ve tried to take a conservative approach. In previous experiments with these fee arrangements business has gone to other countries, but they want our dollars and they want our business. If they threaten to leave, we counter by denying them access to our market. Problem solved. The experts I hired believe we could pay off our national debt in seven and a half years.”
    President White started to speak, but Elliot held up his hand.
    “And that’s only part of it Paul. We must cut defense spending as well, and overseas bases are the low hanging fruit. We calculate we could save a minimum of $350 billion a year by closing just six hundred bases.”
    The President was about to beg off, but Elliott pressed on.
    “Look at it Paul. It’s beautiful. We can generate something in the neighborhood of two trillion dollars a year and not have to cut social programs or any other important safety nets. Once the debt is extinguished we could fund education, infrastructure and social security; all the things we’ve been trying to address for years. Polls show the deficit as the fourth item on the fear factor list in the minds of the American public. What they don’t show you is that it was eighth on the list just five years ago. People are rapidly becoming aware of the risks posed by the deficit. Secondly, it’s really their future they are expressing concern for in these polls. What better way to address their fears than addressing social security. It appeals to the aging baby boomers and the younger generations who are expressing growing resentment at their obligation to pay for their parents’ retirements. And look where the tax comes from; trades. Only thirty percent of the American population own stock, and