Thursday, October 9, 2008

Trouble Ahead; Not Enough Cash To Cover...

Consider the following:
  • The Dow Jones is now down 40% from it's peak. In the last 7 trading days it's dropped 20%.
  • Those declines will mean a significant drop in tax revenues as tax revenue will not the same as it was during years of market growth when market players took profits. Their losses will now be written off for years to come. That tax revenue will not be there for some time.
  • While trillions in investments have been lost, many soon to be retired Baby Boomers have lost money from their retirement accounts.
  • With anticipation of greater and greater job lay-offs the tax roles will be further depleted by the lack of payee's into the payroll tax system will mean great deficits in the social security system.
  • Great declines in housing markets are shrinking tax revenues for states and local governments throughout the country.
  • We've committed over a trillion dollars so far to a bailout into failed tactics that will lead to greater losses, and further depletion of government accounts.
  • The FDIC does not have enough money to cover the bank defaults to come, and will need to be recapitalized.
  • Were currently devoting trillions of dollars to fight wars in Afghanistan and Iraq.

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