Discussion in 'Economics' started by libertad, Dec 2, 2008.
As job losses mount,the first thing the public will default on is credit cards. Funny thing is the CC companys say they may raise intrest rates,how the hell is that going to help them? Only more people will refuse to pay.Nothing will save them at this point.
Sounds like it's time for this generation of Americans to understand the word "savings" and how to apply it to their lives.
This is big.
I hope this translate into less of those annoying "You are pre-approved for this fantastic APR" junk mails that I get every month.
Assuming US market is 14T and 70% is consumer driven then 2T = a contraction of 20%.
But let us assume that those with jobs rediscover the joys of cash and it's attendant perks.
Certainly Walmart, Macs etc will not come to the party but all the small businesses will be driven to offering discount for cash.
Is this sounding more like latin america where cash has always been king.
I wonder how much of US economy will be driven underground.
Let us say only 10%, but hang on that is another 800B, maybe more.
Does this mean that the gov will begin restrictions on the use of cash.
L.A. has never mirrored the US in terms of credit availability.
This is the essence of what defines a highly developed vs a developing population....which tips into property rights, legal stability, etc...
Now this "credit" advantage has become a disadvantage...
Credit-price up.....excessive good experience
Credit-price down ....excessive bad experience....
The most developed will find a more desirable mean......maybe....
In Argentina, our Tax House is offering a completely clean tax slate to all small Companies who are prepared to register ALL their employees.
They are going to need to offer a better block of cheese than that .... something like 40% of the economy is underground and likely to stay there.
Perhaps all countries...
10% consumption tax....only ?
Nice thought eh ?
It will be a higher take......than the current systems....
For a lot of reasons......
Yes, but it doesn't deal to the underground issue where cash reigns supreme.
Paying tax or not paying tax is a national pastime.
In NZ, everything is linked through the tax department including international arrivals, departures and credit cards.
If you spend three weeks out of the country and spend 20 dollars per day, the IRD will ask for an explanation. Somehow or other the fools think that you are not disclosing offshore money.
Separate names with a comma.