Works Cited Davidson, C. (2006, July 24). The history of taxes. In Yahoo Inc. Retrieved November 23, 2010, from http://www.associatedcontent.com/article/45350/the_history_of_taxes.html?cat=37 Ellis-Christensen, T. (2010, September 10). What is retail sales tax? In Wise Geek.
The largest and richest world economy belongs to the United States (“North America,” 2011). Interestingly, this same monstrous economy also holds the title for the largest current account deficit. The U.S. current account deficit is funded from net capital inflows from abroad and has continued to grow throughout the last two decades (Holman, 2001). Economists in the early part of this century theorized that this huge U.S. external deficit was sustainable because it would gradually correct itself and in a few short years, the deficit would narrow, but this was not the case (Holman, 2001). The United States, continually fueled by foreign investments, became a net debtor nation.
If we don 't have credit cards, we can’t build our credit history. If we don 't have a credit history, we aren 't allowed to buy cars or houses with low monthly payments. Having credit cards is a cycle in life because without one thing, we can 't have the other. When people have credit cards they have to use them. It doesn 't help that banks offer many credit cards to people, ending in high debt.
Credit has fees, debt, and no emotions to go along with it. One is more emotionally attached to cash. The debt one can go into using credit is unreal. The way that credit card companies make their money is with the unnecessary fees they tack onto using credit. One should think twice before getting drawn in by the hounding credit card companies; they are not a multibillion dollar industry for no reason.
Second, it means a financial burden on the mortgage holder, which reduces the institution’s ability to lend money. Third, it means a loss of tax revenue for the local governmental jurisdictions. Fourth, it can lead to a reduction of nearby property values, which furthers the issue of lost tax revenue. Fifth, this can place neighbors at risk of foreclosure, as the values of their homes become less than their mortgages. Sixth, this entire situation depresses the construction field, which has historically been a source of well-paying jobs and a driver of the economy.
He currently owes $20,933 on six credit cards at an overwhelming 17.35% interest rate. Unfortunately, instead of saving for retirement, a substantial amount of his income is going toward his credit card debt. Because of high interest, he sees very little of the debt declining, which worries him as he approaches retirement.” (Daskaloff 7) Unfortunately this example has become entirely too common in our society. In a capitalist society, we have a responsibility to each other, if able, to take care of ourselves and plan for our own financial futures. In this example, it is particularly telling that the subject is a financial advisor.
This mindset needs to be changed in our society because it is a stressful and deceptive way of life. Without much knowledge the public is preyed upon by those getting rich on the interest paid, along with late fees and other fines. Then, besides the mandatory modification the homeowners with a loan problem should also be given government tax incentives, credits and other incentives to stay in the home for an extended length of time. There is no short term fix for all of this of course, but I have made the proper suggestions to do away with all the brown front lawns void of Christmas decorations this year. One of them belonged to my now displaced family and the hardship is one reason I am seeking money for my education.
Many people use credit cards because they don’t have the money to make their purchase when they want to.Credit cards also collect interest and the television that cost two hundred dollars at Best Buy has now cost you almost four hundred dollars. Eventually people can not pay back their loans or credit card debt which leads to more problems in our struggling economy. Some people have even refinanced their homes so that their mortage would be less. In the long run it has cost them even more money. When you can no longer pay for your home, the government can forclose your home.
A major part of this debt is owed to social securities account, which is going to be paid when baby boomers retire over the next 20 years. All but four countries in the world has external debt (“Country Comparison: Debt External”). Having a debt is almost as common as having a mortgage. Since its establishment, The United States has always been in debt (“Historical Debt Outstanding – Annual”). The US national debt has had five sharp increases previously in its history.
One of the most common examples of financial crisis is banking crisis. Banking crisis is defined as the situation when the bank is facing bankrupt due to the insufficient of cash flow. Banks usually gain their profit by providing deposit accounts to users, and uses those deposits to provide loans that are paid in a long period of time and gain profit through interest. Try to imagine that if all of the depositors wishes to withdraw their money at the same time, the bank will not be able to return all of the money because part of the money has been used to give out loans or investments. This situation is known as a bank run.