The Third Secret of Fatima

Economy After Florida

20 Economy after Florida

   Everyone was stunned at the losses in Florida. The shock of it sent the stock market tumbling again. The dollar dropped further. In a turn around, the fed had made a decision not to fund the deficit. It wanted to stop printing. No one would buy the notes. The hand writing was on the wall. The US would not be able to pay back it’s debt. Unable to borrow, it temporarily defaulted on its debts.  Instead the fed called for the administration to cut the deficit. Plans began being made to cut Social Security, Medicaid, and the Military. They were going to cut the deficit through the front door of budget reductions instead of the back door of printing money and inflation. Layoffs began in the military. The military began withdrawing from Europe and closing many of it’s 900 bases overseas. Suppliers all over the US but especially in California were devastated by the loss of so many military contracts. 

   Suddenly, no one could get a 30 year loan, so new home sales plummeted. Thirty year mortgages became a valuable commodity. To sell an existing house, people resorted to wrap around trusts. Values continued to fall. Property taxes fell. Schools and municipalities began layoffs. 

   One of the effects of inflation had been that when prices doubled, everyone could only buy half as much. National consumption therefore dropped in half. Business sold only half as much and laid off half their employees. The state governments were broke so they cancelled unemployment and let go of most of the unemployment staff. The states begged the churches and charities to pick up the ball and feed the poor and the now a considerable part of the former middle class. Most of the largest companies had so much in the way of fixed overhead that they could not deal with a halving of income. So they declared bankruptcy in staggering numbers. And laid off more people. Tax revenues dropped and the governments had to lay off more people. As in Argentina, people took to the streets. Housewives beat pots and pans. Unemployment reached fifty percent.

   With the loss of so many students, most of the colleges went into bankruptcy. Enrollment shrank. They could not afford to heat and maintain empty buildings. So they had to sell them at ninety percent losses. which had been the loss ratio of the great depression except that in some cases they now had to give them away. No one could see a recovery in the foreseeable future. 

   Legislatures heaped on new taxes. Most of them were elected by the 65% who did not pay taxes. In several western states, led by the example of North Dakota and Texas, the tax payers, small businesses, and police formed and alliance and took over the upper legislature. The lower legislature was still elected by popular vote. The upper was elected by tax payers according to the taxes they paid. One dollar, one vote up to thirty thousand votes. An agenda was put in place to allow businesses to grow and hire. Simple flat tax rates were legislated. Import taxes were put in place to balance external trade and bring jobs back. The green light was given to harvesting coal and oil shale and to stop importing oil. Refineries were fast tracked. Construction workers started finding jobs. Suddenly, new industries entered the takeoff phase.

   It did not make much difference to Skinner. He had two sets of black trousers and black shoes, a couple frayed white shirts and he knew how to sew. He didn’t need any more books and he ate next to nothing. He didn’t have a car. It was a good thing because inflation had pillaged the annuity fund of his order. All the non essentials had to go.

   He had to give up his office. He met his clients in some of the empty classrooms or offices nearby. He cut his charges and often gave away his time.

   Cap had survived the first couple rounds of cuts and still had a job. Her salary had been cut in half in real dollars. She had been able to preserve her savings. Her stocks and bonds had been just about wiped out but half her savings had been in gold and silver and that had done well. She had to cut back on room order. That had been a sacrifice. The restaurant of the first floor was struggling to survive.

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