Our economy now thrives on creating "artifical" demand for goods and services. By that I mean that demand which normally would not exist is created by liberal credit terms along with low interest rates which creates much greater demand than would normally exist. The car business is one example. Many years ago you could not finance a vehicle unless you had at least 25% of the purchase price for downpayment. On top of that you had to have a good credit rating. Years later you could buy vehicles for nothing down and sometimes even get cash back for just signing your name. How many homes, vehicles, etc. would have been sold if we went back to the credit policies of many years ago? There would have been a tremendous decrease in demand thus impacting jobs up and down the supply chains. Our economic guru's decided to increase demand via liberal credit/easy money. Problem is one day someone has to pay the bill. There is no free ride, at least for the taxpayers. Now the government is trying to keep the economy rolling by throwing more money at the problem. Kind of like a pyramid scheme. You keep pumping money into it and things are fine. Once the money stops, even if just for an instant, it collapses. Live by the sword, die by the sword. |