I much prefer - US citizens rack up unprecedented credit card debt to
shore up falling economy, excessive government spending and decreased taxation
leads to large budget deficits. Banks and financial insitutions are unable to
cope with the resulting finanacial debt load and forclose on the US and its
citizens to repay their loans.
--Binhan
> -----Original Message-----
How about a sudden surge in health awareness across the world resulting in the
failure of the MacDonald's Corporation, thus collapsing the US economy?
;-)
> --- Foxx Travis <lordkalvin2002@yahoo.com> wrote:
Ok,
How about a genetically modified petroleum-eating bacteria
escapes from an environmental clean-up lab. It infects gas stations and
eventually reaches petroleum processing plants. Travel and commerce to the US
is banned until the bacterium can be cleaned up. Industry, power, and commerce
come to a stand still as local fuel supplies are depleted or contaiminated
with bacteria. Although the ban lasts only three months, the US economy is
left in a shambles.
--Binhan
> -----Original Message-----
Too realistic. Come up with something more
far-fetched.
> --- B Lin <lin@rxkinetix.com> wrote:
That's more like it. ;-)
> --- B Lin <lin@rxkinetix.com> wrote:
> I much prefer - US citizens rack up unprecedented credit card debt
mmm, IIRC decreased taxation led to larger government revenues? Recent history
is not my forte, but isn't this what Kennedy and Reagan did? I grant that
"unprecedented credit card debt" and "increased government spending" lead to
problems.
The theory is that if you reduce taxes, there will be more money available to
spend, and people and companies will use it to buy stuff that is taxable,
which generates more tax revenue. The problem is that
it's dminishing returns - for each dollar you send back into the
economy, you only get a fraction back in taxes. To some extent more money in
the system means a better chance for growth which would make up the
difference.
The current economic thinking is that deficits make it harder for the
consumer to borrow - i.e. if the govenment is taking out 1 Trillion
dollars in loans, that is 1 trillion less for consumers to access, leading to
higher loan rates. (assuming that there is a limited pool of money to draw
upon). So banks can finance both government debt (bonds) or loan money to
consumers (loans and credit cards) but it becomes difficult to do both if both
have high demands. With pressure from both
sides, usually one side gives - and it's usually the consumer who ends
up paying higher rates of interest. Not a problem, unless you happen to have
borrowed a lot of money (i.e. credit cards, mortgage). So any money gained
from a tax refund is now eaten up by the higher interest you are paying on
your loans.
It's far mor complex than that since there are also timing and hundreds of
other factors that can move the economy (like a butterfly flapping its wings
in China) but that's the general gist of it.
--Binhan
> -----Original Message-----
> mmm, IIRC decreased taxation led to larger
You are correct, the DECREASE in taxation caused
a massive INCREASE in government revenue. It was
irresponsible spending increases in the democrat controlled congress that
brought about the deficit.
Bye for now,
[quoted original message omitted]