Thursday, February 9, 2012

Credit Crunch

While traveling the aisles of Costco, or any store for that manner, I was impressed by the quantity and diversity of products and produce all available for sale, supposedly, at a profit for the store, the producers, the manufacturers, and the growers. In addition all of those people who have handled and transported the merchandise are supposedly making a profit.  I wondered how it would be possible for all of this commercialism to fail? Why would all of that profit making come to a stop?

It donned on me that much, if not all, of the merchandise was produced, transported, and purchased on credit. The transportation corridors, the financial systems, the safety and security measures and practically everything else is subsisting on subsidies provided by tax dollars and paid for by the consumer, to a large extent, with credit.

If credit were extend based on risk or lack thereof, budgets based on actual revenue instead of projections and unrestrained credit, and our taxes were calculated relative to actual cost of services rendered all of this consuming and manufacturing would grind to a creep or crawl and our standard of living would drop like a rock.

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