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Old 12-29-2005, 09:39 PM   #24
AnthonyKing

Join Date
Nov 2005
Posts
574
Senior Member
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Thank you for the explanation. I think this is how I see it as well, although I couldn't express it as well.

So in short what it means, if I understand it correctly, the bulk of purchases are made by those average workers who are slowly losing their jobs. This results in a need for even lower prices which results in further cuts... Meanwhile, those CEOs et al (the other 20%) are not effected because they depend on the company to make money, not the worker.

Sorry to simplify this so much for you Joao but I want to make sure I understand it properly.

If this is the case, the follow through I can see is that social programs will have to be put in place for these workers in order to maintain their spending habits. Without this spending, the corporations will not be able to meet their targets (ie make profits) and either close or have to re-organize. As well, since more and more people will have to get social assistance to make ends meet (there are already working poor and this trend may continue) it will be up to the other 20%~ to pay for these programs.

If I am wrong, or way out in left field, please let me know. I have broad shoulders.
Since the tax cuts take bigger percentages off of what the upper class pay then they will not be paying more for these programs which means either deficits will get even larger or programs will be cut such as what has been done recently only on a smaller scale.
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