How would the nation be affected if your credit limts were reduced?

If our credit limits are reduced, the immediate effect is a broad based sales decline. Think about it, as a nation, with an economy based on consumption, when we run out of cash we buy on credit. If we can't buy on credit it doesn't get legally purchased. If it doesn't get bought it doesn't get sold, so no more need be made until the ones already on the shelves get sold. If no more need be made, production workers get free vacations, and become unemployed, unable to buy either. Social security sees less revenue, and the lucky still working get taxed higher and higher until....even church revenue will fall.

I have very little debt, thanking good parents who lived through the depression. I'm 42, semi-retired.

It won't change my life except how everyone else's life affects mine. There will be a baby birth bubble as non-working parents are home more. Food prices will increase, rental prices will increase, home foreclosures will spike up again.

I'm seeing it has already happened to a lot of people on YA in the credit section. But, all I keep getting in the mail is increases in my credit limit, balance transfer checks (I have no balances to transfer) and 0% financing offers for extended periods of time. I think the credit card companies are evaluating who has credit, how much they are using and the debt to liquidity ratios for those who do have outstanding debt. Those who they feel could default are experiencing the first round of their belt tightening of credit. It will continue to happen as the unemployment numbers increase. It wouldn't change my life much as I don't use much credit, but those who don't pay off their balances or live beyond their means will see a huge difference in their disposable income and their buying power will erode as they have to pay more toward debt reduction. For the economy, that translates into less consumer spending, the retailers profits will be curtailed and less savings and investment.

Recession +Deflation, deflation is like the Bermuda Triangle .