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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: Maurice Winn who wrote (184)	11/21/2002 8:08:31 PM
From: Ahda	Read Replies (1) \| Respond to of 621

With interest rates cuts, the main change is reduction in tax collections. Combined with the capital gains tax losses, the effect has been an enormous tax cut! If you are speaking of housing you are correct. The lower interest rates have enabled people to borrow a lot of money and order production with the promise of paying back later from future income. So business has been spurred. Production has been brought forwards to now, from when borrowers would otherwise have been able to spend. They'll be able to buy less later, in favour of buying now. Which is a good idea if there's spare productive capacity now, which there is. I don't agree that business has been spurred. If you are looking at big ticket items yes but business has cut costs and consumers have cut back on cash spending. We are becoming less and less of a producing nation so for us lack of products being created are neither a here nor there. Companies are doing more production elsewhere and my hope has been the financing end of that would remain here. We are not going to suffer from over production in this nation . We might just end up suffering from too little production to balance the whole of the nation.