Quote:
Originally Posted by BAN SUVS
People that "trade stocks on the internet" aren't really as affected by a sudden spike in the cost of things they have to or want to buy. Really, it's just a mental issue that people would have to get over before they can feel normal paying an extra $8 for a video game or an extra $4,000 for a car. There would be all sorts of weird effects in the market bumping specific things up or down- car sales, for example, woudl suffer across the board because people suddenly have to pay a lot more up front out of pocket and/or have better credit to get the taxes financed... but in the end, eventually, you'd probably be right that things would more or less reach equilibriium with where you started.
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Loans wouldn't be affected... everyone suddenly makes 20-30% more income thus bumping the amount they can afford to borrow by (hopefully) more than the increased cost of the product. If done correctly, people will actually be able to borrow more (not that they should... as that sort of thinking is what got us into this whole credit crunch in america to begin with).