Indications of serious developments
Warren Buffet has accumulated more money than any other human in history, mostly by predicting what other humans actions will mean for the finances of corporations and the economy as a whole. Last week, he wrote an editorial in the New York Times and discussed how there exist some very real scenarios which could lead to the collapse of the US economy. “We don’t want our country to evolve into the banana-republic economy..” he said, and using the analogy of consequences from polluting the environment: “Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt.”
Is he being too pessimistic? Economist Bill Sardi is more bearish, predicting a catastrophic bank run. Possibly in a short period of time. (He mentions days, but this is probably a stretch). However, he provides the math to prove it. “If just a small portion of American bank depositors hear that the FDIC had to tap into the US Treasury for funds, and these depositors feel their banked money is at risk and want to withdraw some of it, the mother of all bank runs could ensue. This could create the day of reckoning that many have predicted. A short banking holiday would have to be declared and who knows what happens from there – troops in the streets, issuance of new currency, martial law? Don’t think those in the Federal government haven’t made plans for such an occurrence”
Yikes.
Municipalities are already beginning to use draconian measures to attempt tax collections from businesses. In the tiny mountain town of Dahlonega GA, the tax collector showed up at a small convenience store, flanked by an armed deputy and a tax consultant, to collect their overdue tax bill from the cash in the till. In the state of Georgia, tax commissioners are ex officio sheriffs, with all the power that implies. Lumpkin County Tax Commissioner Rachel Pruitt exercised that power Monday when she clipped her badge to her waistband and seized the cash and inventory of Cavender Corner’s convenience store for back taxes.
In Providence RI, a pet store owner was raided and shut down because of a $6,000 tax penalty. Dr. Doolittle’s is one of the 1,092 businesses the state recently ordered to close on the spot for falling behind in their sales-tax payments. About half the businesses who got the cease-and-desist notices in late July paid off their debt to the state and are open. The other 500 are in various stages of resolving their problems, according to figures the state released Friday.The sign on the door in front of hundreds of squawking birds and other creatures says, ““At this time we have no money and we are not allowed to open to raise the money.” The owner still goes to the store every day.The 13 puppies — Shih Tzus, cockapoos and other small breeds — need to be fed and given water. The ferret needs to get out of its cage. The birds crave attention. He faces a dilemma. He wants to pay his taxes, but the only way he can do that — reopening the shop — is forbidden, unless he pays the taxes.
