You begin with a free and democratic election, in which the population votes for a party considered a 'terrorist' entity by the US and its allies.
The US then not only cuts off all funds to the government, but also uses its economic and political muscle to prevent other countries from supporting that government too.
Since 1/3 of the population relies, directly or indirectly, on a state salary of some sort, 1/3 of the population is immediately effected by the sudden loss of income. Naturally, the poorer you are, the less money you have in savings or in capital investments, and thus the harder you are hit.
This 1/3 of the population thus has to start cutting back on expenses. Bills are no longer paid and people have to start relying on credit from shopkeepers to buy even the basics like food and medicine.
Shopkeepers, faced with declining income due to the spiraling credit, begin to cut back on expenses themselves. If they are able to, they establish a line of credit with the suppliers of their goods. If they aren't, their stock declines.
Suppliers, such as food producers and clothes makers, are forced to essentially provide their product for free, or stop providing it. They in turn cut back on expenditure.
Forced with a widespread recession, private institutions are heavily effected. All the staff at the University of Birzeit are told they will be paid half wages this month, and will have to work for free over the summer semester, since students can no longer afford the tuition fees.
Despite this situation life continues because:
1, People are by now use to frequent and unexpected (financial) crises, and know it will end sooner or later;
2, Due to the frequency, they have developed coping mechanisms to endure them;
3, There's no much else to do anyway. They're certainly not going to sit at home just because foreign governments are systematically punishing them.
In other words, that's life in Palestine!
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