Will it be the 1920-30's all over again, NO! But, Lifestyles based on financial leverage is going to disappear for a while. What I mean is consumers will need to save up money and have a down payment when making a large purchase, for example, a house, a car, etc...
More individuals will probably start taking the bus. Driving can be expensive, you have to put gas in your car weekly, change the oil every 3 months, pay for insurance, buy new tires when appropriate. O' I almost forgot the monthly CAR Payment. Look at the cost of owning and operating an automobile over 12 months and you will be shocked.
When it comes to business & consumer lending, you may hear C-Level Exec's say "Do they have skin in the game" meaning do they have a down payment to help offset our risk. That's right RISK, you will be hearing that word a lot more in the future. My belief is needing a downpayment will deter most from just worrying about the monthly payment, and consider the over all cost of the purchase. This will put a staggering stop to impulse purchases. No more 100% financing or sign and drive events.
Conclusion, innovation or risky businesses along with "mom & pop" business will most likely stop or come to a slow. Dry Cleaners- beware, Dog Walkers- beware, Small Coffee Shops- beware, Non Profits- beware, and the list goes on.
The good news is the amount individuals have in there savings account will/ should increase. If you did know, the national savings average has been negative over the past 2 years.
