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TechnoratiThe Next Bubble Is on the Way: Credit Card Debt
Why Are We All Complicit in Our Own Economic Servitude?
Let me try a few words out on you: "Charge It," "Swipe It" and "Priceless."
You know exactly what I am talking about. We all have credit and debit cards. We all use them, and many of us keep our lives going because of them.
That is, until the bill becomes due.
The sad truth is that we are all complicit in our own economic servitude even if, at bottom, it's not our fault because we live in a consumption society, and don't feel we could live without them.
While many eyes are focusing on the housing meltdown and its hugely negative effect on an economy clearly moving into recession, few are paying attention to the next bubble expected to burst: credit cards. You would never know it by watching those slick VISA card ads on the Olympic TV broadcasts.
Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy.
You and your credit card have become key players in the highly unstable financial crunch. Mortgage lender cupidity and bank credit card greed wedded to financial institution deregulation supported by both political parties, have been made manifestly worse by Bush administration support-the-rich policies. It has brought us to a brink not seen since just before the Great Depression.
While campaigning in Edinburg, Texas, in February, Barack Obama met with students at the University of Texas-Pan American. "Just be careful about those credit cards, all right? Don't eat out as much," he said. After the foreclosure crisis, he warned, "the credit cards are next in line."
The coupling of home equity debt and credit card debt has gone hand in glove for years. The homeowners at risk can no longer use their homes as ATM machines, thanks to their prior re-financings and equity loans, often used in the past to pay off their credit cards. Indeed, homeowners cashed out $1.2 trillion from their home equity from 2002 to 2007 to pay down credit card debts and to cover other costs of living, according to the public policy research organization Demos.
To compound the problem, fewer people are paying their credit card bills on time. And, to flip the old paradigm, more are using high-interest credit card cash to pay at least part of their mortgages instead of the other way around.
Younger people are being crushed by this debt burden as college students and new consumers. Emma Johnson of MSN Money reports that "Generation Y" is broke.
"The democratization of credit has really generated a competitive spending culture, and plastic has allowed for material goods not had in the previous generation," says Bob Manning, author of Credit Card Nation. "Most of us grew up in a home with just one or two bathrooms for the whole family, he points out; today, new homes usually have at least one bathroom per bedroom."That change has happened so fast," Manning says.
"This generation feels that somehow or another they're going to figure out some technological advancement that's going to get them out of their financial troubles and outsmart the market," says Manning, who served as adviser to the documentary In Debt We Trust. The documentary paints a picture of national financial crisis stemming from the personal-debt burden. (See InDebtWeTrust.com)
Happily, this issue is finally being addressed by Congress and the Federal Reserve Bank. When asked for comments, the public overloaded the Fed's website as the New York Times commented:
When the Federal Reserve asked for comments on its proposed rules on abusive credit card practices, an astonishing 56,000 poured in. Most were from outraged consumers. They told of interest rates skyrocketing when they paid an unrelated bill late. They complained of unwarranted late fees and pushed-up due dates. One Pennsylvania customer fumed: "I'm fed up with credit card company tricks that drive us deeper in debt."
This anguished deluge should send a clear message to leaders in Washington. The Federal Reserve should swiftly adopt its proposed rules against unfair or deceptive credit card practices. But the real burden to curb these abuses falls on Congress.
This discontent is being organized to press Congress to act by groups like the Consumer Federation of America and the Center for Responsible Lending. And Congress is listening:
WASHINGTON (Reuters) - Legislation aimed at curbing credit card billing practices that surprise borrowers with unexpected interest rate increases and fees was approved on Thursday by a U.S. House of Representatives committee.
The bill approved by Financial Services Committee mirrors Federal Reserve proposals that would effectively end double-cycle billing -- in which card companies reach back to prior billing cycles to help calculate the interest charged in the current cycle.
These reforms are a start but much more needs to be done because it's not just billing practices that is at issue -- it's high interest changes, deceptive marketing, and arbitrary rules. On top of that, there are other loans that need scrutiny including payday lenders and student loans. And of course our own addiction to shop until we drop.
Also, let us not forget that our credit card companies have been colonizing markets throughout the world. As the New York Times explained in a series on debt, "As the American blessing of credit cards became widespread, so did the American curse of debt."
Bear in mind the experience of another addicting industry -- tobacco. As they came under restraints in the US, they escalated their poison pushing worldwide.
Debt is a global issue and has to be treated as such.
Just as groups like NACA provide help to homeowners in distress, we need a major effort to help the victims of credit cards -- with practical assistance and political demands for regulation and relief.
News Dissector Danny Schechter made the film In Debt We Trust (InDebtWeTrust.com). His new book PLUNDER: Investigating Our Economic Calamity is out later this month from Cosimo. (Newsdissector.com/Plunder) Comments to dissector @mediachannel.org.
114 Comments so far
Show AllThe entire world economy is based on debt! Fake well-being.
Don't forget that Credit Card companies also collect a "Merchant Discount" on each purchase. They make money on the transaction itself.
We pay of the credit card every month but live in a relatively inexpensive neighborhood and have fewer toys than most people in our professions and income level. It lets you sleep better but doesn't buy you much in the way of respect and prestige.
Unfortunately, people tend to judge you by what car you drive, where you live, and what you wear. To paraphrase DR. Kelso on Scrubs "... (we're) like crows, we like shiny things." Wise up Ahmerikuns!!!
SAMSON wrote:
>>The headline is very misleading. Either that or the >>author doesn't know what a 'bubble' is.
I agree to a certain extent until you consider that the over-zealous investor (Credit Card Company) is over-funding the over-valued commodity (Borrower).
I found Samsons remark very telling:
Someday there will be a fair number of construction jobs both reconfiguring them to less than 4000 sq ft per family...
In my rust-belt neck of the woods, 4000 sq ft IS a McMansion. The average house in my neighborhood is 1200 sq ft and families raise up to 2-3 kids in them just fine.
One of the requirements from the revised bankruptcy laws is to require people to go through a financial advisement pre-discharge "course" before they can get their debt discharged. Ask any bankruptcy attorney and they'll tell you that this is just a way for these people to make more money. (The courses run approximately $50 or more.) I watched a video of one of these courses, and the guy was giving some good advice... until he got to the part about health insurance. He reminded people that about half of the people who declare bankruptcy do so because of debt from healthcare bills. So, he advises you to make sure you buy health insurance. Great advice! Sounds as if health insurance is very affordable for everyone, and if you have a major illness your copays and deductibles will be very easy to pay, doesn't it?
"For the original point made and the context of the greater discussion your statement is irrelevant and irreverent, completely intended to contend rather than to amend."
I was responding to DogFace who had said this:
"HELLO! 401K‼! Excuse me! For the obtuse of you out there, that is the stock market."
This is factually incorrect. A 401K is not "the stock market". It's merely a savings plan with a certain tax status. There are a variety of asset classes that can be contained in such an account such as stocks, bonds, cash, and mutual funds that contain these assets or a mix.
Now how could you possibly claim that I missed the context? The answer is you cannot.
"Hello, you really can't fix stupid can you?"
Right back at you.
jakenewton, I was well pleased that everyone had simply been ignoring your posts up until near the end here. You do incessantly spew forth summary conclusions, generally of the nature "completely false," without any supporting evidence of your own, while then ironically challenging others to support their statements. And you split the finest of hairs over intangible points simply not bearing any real significance to a constructive discussion of the main topic.
For example,
"Completely false. This is a very common and false belief. A 401K can be put into stocks, bonds, or money market funds.
Hello, you really can't fix stupid can you? Your statement, in the context proffered, is akin to claiming a Cadillac, Volvo and Ferrari are not all cars. For the original point made and the context of the greater discussion your statement is irrelevant and irreverent, completely intended to contend rather than to amend.
It's good to know the folks here have you figured out.
revengegirl - I believe that gross over-use of anti-depressants is part of what makes us passive. It is part of what allows people to go along in untenable situations spending themselves into such a hole they cannot climb out.
Outrage and resistance would be more realistic responses to all kinds of money problems resulting from the great national transfer of wealth from us to the rich. But anti-depressants and media misinformation mess with our minds and keep us from thinking clearly.
"why all the profanity and anger?"
Sorry, my intention was to be blunt, with Namaste specifically.
why all the profanity and anger?
I skip the angry posts and i bet others do too, but i bet there are some valuable points in the posts if they would just wait a minute to submit and re-edit before getting too emotional. just 1 guys opinion..
chessgames56 -
I agree with what you said. take responsibility. educate yourself, and only carry a balance if it's an emergency for some reason.
the government (tax payers) should not bale out irresponsible citizens. the credit card companies have acted like predators for 20+ years and everyone should know that by now.
I hope everyone takes care of themselves, and passes on advice of personal responsibility with finances.
"Until you show that you actually care about something,"
I care when otherwise intelligent people, including some on these forums, seem to suspend all critical thinking skills when it comes to certain subjects.
"I'll tell you when …"
Fuck you and your stupid test. Don't sit here and claim you are doing battle with anyone when you are just talking shit.
"Why should anyone care about you?
No reason and right back at you. I don't care if you wish to discuss these issues or not. Don't you even know where you are?
"It's always such a "joy" to battle a apparently forthright ( but really twisted ) adversary"
Let me know when you are ready to actually discuss something here.
"If jakenewton is for real and not getting paid "
When will you guys get out from under this shit? I *wish* I was getting paid. Why do you think I am being paid? Do you really think the ideas on CD are in the mainstream and mine are radical?
"No individual and no economy can continue to spend more than it earns before it reaches a point of "no return"."
What did I write anywhere that leads you to think I disagree with this? You should try addressing what I've said here and not worry about who I am. That's beginner's stuff what you are doing.
Au contraire gail. Every debt is always ultimately repaid.
sun827 August 12th, 2008 2:53 pm
"it seems jakenewton has nothing to contribute except refuting the facts in everyone's posting while offering no facts of his own.
very useful. thanks for joining in."
sun827,
"One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. We're no longer interested in finding out the truth. The bamboozle has captured us. It is simply too painful to acknowledge -- even to ourselves -- that we've been so credulous" - Carl Sagan
If jakenewton is for real and not getting paid for his government cheerleading performances on CD, then he like many others will learn the hard way. No individual and no economy can continue to spend more than it earns before it reaches a point of "no return".
Namaste does not wish to address any of my points or answer any of my questions. What a surprise.
bornfreemen August 11th, 2008 11:20 pm:
"We should have seen this coming, the Bush Administration passed laws a few years ago stopping credit card debt from being forgiven in a bankruptcy court.
We must pay it back on a payment schedule."
That's what I said earlier, but apparently some like NMlib (August 11th, 2008 6:34 pm) don't get it.
I have a theory:
Credit Card debt is directly related to antidepressant use.
It makes sense that those who rule the world would like people medicated - so that everything seems "Fine".
Then people don't feel bad or worried when they spend money they don't have.
"But what I'M most PROUD of not having is a…..Federal Tax Return for these last 8 years."
No doubt will complain about some service he thinks he should have but doesn't.
I guess I'M a 21st Cen. anomaly-no CCards.No cell phone either,for that matter.And I DON'T OWN a car or drive.And ONLY live in a cave FOR 6MO a year in the HIGHCOUNTRY COLORADO.
But what I'M most PROUD of not having is a.....Federal Tax Return for these last 8 years.No PAYOLA TO THE EVIL WAR MACHINE.And perfectly LEGAL, as I SIMPLIFY AND LIVE on less than TAX-able INCOME.
And did I mention I SKI or Hike (CLIMB) MOUNTAINS everyday.
THAT'S HOW TO 'GET EVEN'-Live the DREAM!
There is a way to totally eliminate almost all your unsecured debt, and it's not a scam. I had my $45k student loans with Sallie Mae eliminated and another $40k in credit card debt eliminated, and all of it wiped from my credit reports. It has to do with legally using contract law against the big banks to your advantage. Contact me, and I can tell you more. fourfingerjack AT yahoo
"According to the government and the media our economic growth has been much higher than Europe for many years yet the average and poor people in those countries are gaining on and surpassing Americans in wealth. "
Where do you get figures showing Europeans are surpassing the US in wealth?
Most of the so-called economic recovery has for years been based on nothing but the debt service economy, or, as it was known in more forthright days, the COMPANY STORE. These buzzards won't pay people enough to live on, but they'll gladly lend people money at exorbitant rates of interest. Meet the new capitalism, same as the old capitalism. The owners of their wretched society aren't ever happy until they become a theater of heads on sticks, and if they keep playing it the way they're playing it, they may just get their wish. Hopefully it doesn't come true until after what the poet Ruben Dario called the "drunken vengeance" of the poor has risen and subsided, but that hasn't been the historic trend so far. We learn the hard way, and that's the way we learn.
"The basket of goods according to shadow stats gives a higher rate by about 4% these days "
There is no way John Williams at shadow stats duplicates the expensive survey work that the BLS does. I am still waiting for a reason to beleive his stuff.
Bernice says: Actually, it IS possible to live without credit cards (unless you are unemployed and have NO other way to cover your expenses until you have an income again). You decide (and abide) that if you don't have the cash, you don't "need" the item.
I disagree. Sometimes the item is an operation, a visit to the dentist or an education. Health care, student loans and basic things like food, transportation and energy are responsible for a lot of debt. Others have pointed out how real wages and benefits have declined.
But you can be careful and resist consumerism. Resist the marketing of electronics and jewelry. One ad that gets my goat is one that says "Every kiss begins with Kay", which is a jewelry company. It shows a husband giving his wife a diamond. What is she - a ho who needs jewelry before she will kiss her husband?
Use what you have. I can count on one hand the new pieces of furniture we have purchased in the last 40 years, yet our apartment is clean and inviting. We have an 17 year old car that is shared by three households in the family, yet we get where we need to go. We buy few pieces of clothing, some of it used. Cable internet is our only luxury.
Yeah lets tie up in an argument of who counted how many prisoners. There are any number of sources google comes up with that says we have more prisoners than any other country. The point is these people are not counted as unemployed, there would not be jobs for them if they were out (in general). Other nations lock up a lower % of their people and are more inclusive in counting unemployed probably because of their social safety net.
But you still miss the point that most people think of inflation as a basket of goods getting more expensive over time, but that is not the calculation and the way it has been calculated is changed frequently. The basket of goods according to shadow stats gives a higher rate by about 4% these days and that seems to be in line with the prices I check in stores. Core inflation is even less related to regular people because it doesn't include energy and food two of the most important costs for the average and below in income. The MSM tosses out core inflation or other measures without even identifying the measure they are reporting, how it was calculated and what it means for regular people. They also don't tell you that other countries and groups measure in other ways.
According to the government and the media our economic growth has been much higher than Europe for many years yet the average and poor people in those countries are gaining on and surpassing Americans in wealth. Our media and government claims we have the best health care system in the world yet life expectancy, infant mortality and cost are substantially better than USA.
The government numbers are POLITICALLY ARRANGED to give the expected number. Investors, environmental activists, bloggers, right wing nuts, communists, greens, fascists, me, you, economists from the Chicago school, etc. all have their own numbers to grind their ax. Number confusion, lies, irrelevant numbers, and sound bites make sure the people who listen are usually misled.
A standard set of numbers and in depth analysis of any topic you pick in this country would freak out people if you could actually get people to pay attention. When economic disaster hits, as it always, eventually, does we are all surprised that the facts were unknown before the disaster.
Many people were surprised and the rest will be surprised when they find out that 3% of the world oil supply is in the US and half or more of all the oil drilling is in the US yet our oil production peaked in about 1970 and is falling fast. Tuning up cars and properly inflating tires will save 4 times more oil every year than all the oil drilling that Bu$h the inferior wants to do will produce starting about 10 years from now when it actually hits the market.
I'm with the poster above: if I'm faced with an emergency that I have no other choice but to use my card, I will use it and risk bankruptcy.
HOWEVER, there is no excuse to not live responsibly whenever possible. Quit blaming credit card companies for your profligate spending, and proactively pay off the balance on or before the due date. Further, only spend what you can pay off at the end of the month; if you go over, lay off the card until you catch back up. It's all too easy to blame the CC company when YOU are the one who is out of control (not accusing anyone here in particular, just speaking generally).
Stop it, and reclaim your life.
On bankruptcy--
To the poster who said 'it may not work for you'--you got that right, but you left out the bloody details.
In order for you to discharge cc debt (chap 7) and not be forced into repayment (chap 13) you must earn--get ready-- below the median income for your state. This is in the $35K realm in most states. If you earn more than that, you are forced to repay at least a portion of the debt.
And student loans, for many people, are in the high 5 to 6 figure range, and cannot be discharged. Courts have ruled that even if your only income is social security disability, where the GOVERNMENT ITSELF admits you can never work again, they get to take 15% of your check, until you die.
And the notion of taking out $2500 cash advance to pay for a lawyer is flat out fraud under the bankruptcy code, as you will have borrowed cash you well knew you could not repay. A person in dire straits, (unemployed) if they have $2500 in cash, is likely better off hiding it in a mattress and buying food and paying rent--and hoping like hell these crazy laws get changed.
Clinton made student loans permanent millstones about the borrowers' necks, and Bush effectively did the same with cc and other types of debt.
So, while I appreciate the sunny optimism, I feel it is pretty misguided. Congress and the past two administrations set up this train wreck long ago, and it is far from over.
Peace.
" I will gladly pay more taxes. However, I want my taxes to pay for the things that I need. "
You are willing to give up rights to your money and let others decide about what it is you need?
"HELLO! 401K‼! Excuse me! For the obtuse of you out there, that is the stock market. "
Completely false. This is a very common and false belief. A 401K can be put into stocks, bonds, or money market funds.
All I can say is god bless those lucky bastards that have not had a catastrophic event in their lives and do not get it. Whatever angel sits on your shoulder, I hope it slaps the crap out of you for not understanding life's uncertainties and an accounting system that is broken in this country.
I will say it again.. ..
"The house next door may be experiencing some form of terrorism. They get up every day and go to work like the rest of us. They bring home a paycheck that has not increased for ten or more years while the cost of living has soared. Maybe some are making that miserable excuse called a minimum wage that does not provide for a respectable living in these times. Maybe it is due to failing health or a catastrophic accident that their income has suffered. For whatever reasons, none of which matters here, they are unable to meet the living standards set by their communities. "
Some of the lemmings here are certainly provocateurs that have a lot of time on their hands. Whatever living people are making, it DOES NOT COVER THE MAJORITY OF THEIR IMMEDIATE NEEDS.
We have laws and covenants in place that are not enforced. Ill-informed people are not even aware of these ratified accords. Article 25.
http://www.un.org/Overview/rights.html
When do we demand our due? I will gladly pay more taxes. However, I want my taxes to pay for the things that I need. Those things being health care, education, food, shelter and my precious infrastructure. I DO NOT WANT MY TAXES GOING TO THE WORLDS GREATEST ARMS DEALERS WHO NEEDS WAR AND MORE WAR TO MAKE THEIR OBSCENE PROFITS.
HELLO! 401K‼! Excuse me! For the obtuse of you out there, that is the stock market. What goes up must come down. Then where is your precious money. Your employer is not hurt…but your retirement sure as hell is.
"When they calculate the savings rate, they simply don't count 401K's. This may have changed in the last few years, but I doubt it."
Doesn't seem right. I'll put it on the list of thimgs to check out.
jakenewton August 11th, 2008 10:49 pm
When they calculate the savings rate, they simply don't count 401K's. This may have changed in the last few years, but I doubt it.
It's similar to getting an inflation rate without counting food or energy.
I have a very hard time seeing anyone as the "victim" of credit card debt.
Its suggested that some use it as a last recourse. Yes we might all be under the gun someday, but still...a "victim" I think not.
Now we come to the manipulation and overcharging on CC debt. The money lenders are loose in the Temple again. No doubt this should be redressed.
P.S.
I operated the InDebtWeTrust.com link and learned a credit card is required to order the DVD.
Hmmmmm.
"And of course our own addiction to shop until we drop."
Should have been repeated at the end of each paragraph.
"The US has about 1% of its work force in prison and perhaps another 1% in other legal process that keeps them from working. European countries usually count these kind of people as unemployed. Here they don't exist for employment calculation."
Any references to support this?
Interest profits travel only in one direction> to Financial institutions> who owns them?> you think about it.
People should take the time to watch the August 8 Bill Moyers (PBS) program on the gobs of money that are being made off the working poor. They even have a franchised used car dealership that has no prices on the cars and your payments (total cost is never discussed much) are based on your credit history (of which they have a very intimate and detailed copy). Naturally a high percentage of these cars come back to them in repossessions so they can keep selling the same car over and over between wax jobs.
The program goes on to address hospitals that have sold their (in this case a non-profit hospital) outstanding unreceived debts to a collection company who go after them with a vengeance and, of course, jack up the interest rates so them become impossible for, say a waitress, to pay off.
The third part is an interview with two economic reporters/authors who share their candid observations and wisdom about what needs to be done to correct the corrupt system of fiance and banking in this country.
Usery is probably something awful you do to bears. And Jesus threw the money CHANGERS out of the temple, not through any objection to their practice as such, but rather because the prohibitive rates of changing the local currency to the Roman currency preferred by the Priests meant that poorer people could not afford to have their animals sacrificed ie they could only afford to pay to have a priest sacrifice a chook rather than a goat. There were probably a few pissed off goats that day, and some relieved chickens.
I think what is being missed by a lot of commentators about the credit card squeeze is that the advent of easily available credit came along hand in hand with an increasing casualisation of the workforce and wages for non-casual workers slowing down.
I don't have a credit card, but the last time I did get one was because I was working in a casual position with no sick or holiday pay. When I knew I had to go and have an operation I got a credit card because that was the only way I could have got through the weeks without pay.
Many of my friends in the arts and hospitality industries use their credit cards not for luxuries, but so they can survive. And here in Australia tertiary institutions have moved more and more to contracting academics to work only the academic year, leaving them high and dry with no pay during the long school holidays. Of course they use their credit cards just to keep going so they can go back to doing the job they love the next year.
Easily available credit has been a very clever way of allowing business to have a totally flexible and cheap workforce without taking any responsibility for employee's well-being. If you can't survive an illness, if you can't take a holiday - tough luck. Get a credit card. I don't think it's some sort of conspiracy, but I think it's worked out very well for the powers that be. Keeps people quiet, too, being so much in debt that they're too scared to rock the boat in case they get tipped out.
Twenty-five years ago I was so wrapped up in credit card hell that most of my monthly income went to pay the monthly credit card payments. It was then I said to myself "no more," paid them all off, and haven't charged a single thing since. The only monthly bills I have now are my mortgage and utilities. And guess what? Now when I want something, I always have the money to pay cash for it. I even bought my last car (brand new) for cash! You'd be surprised how much "simpler" and less worrisome life becomes when you never have to worry about credit cards/payments! Money actually tends to constantly build up in your bank account and you wonder why you ever needed a credit card in the first place. Want a worry-free existence? Cut up your credit cards! The only card I carry now is my bank debit card for which I pay NO monthly charge or fees.
Back in 'The Day- (early 80's), when RR was King, I was in college and despite applying for credit 5 or 6 times, I was completely shut out. The messages the bank gave me for the rejections were cryptic in the extreme. One example I clearly remember was: "Not enough Movement in your accounts". Things that make you go Hmmmmmm.
One reason I wanted a card was that I was sternly advised that if I had none- forget about renting a car. Fast forward to the 2000's and the pre-approved credit card offers are falling like rain in Seattle! Nowadays, I have a home equity line of credit for $37,000 that I have yet to use, as well as a couple of credit cards that I use only in situations like car rentals while on hiking vacations.
I have never purchased a new car and have always relied on used and hand me downs from relatives. I sympathize with those between a rock and a hard place, but on the other hand, I would not be mistaken for one of the "Rich and famous" My furniture is inherited or simply thrift store junk. I didn't take Dumbyuh's stupid advice to go out and shop after the tragedy of 9/11.
In Dumbyuh's world, "If you have your health, you have Everything", has taken on a very tragic new validity. Welcome to the new third world.
Closed all but 1 Amex and 1 Visa, my Mac card. Amex calls one day, blah credit limit is 35K now, I call WHY?, Am I late?, No. Do I pay on time? Yes. Why are you doing this then? Well, the economy and others do not pay. I said they don't pay so I get F$$KED!, Thank you Sir, Asshole, no more credit charges, I just won't. There is a new bill in Congress should be law soon. They MUST send bills at least 3 weeks prior to due date, lots 'O good things. I cannot wait until they sup.
The credit card bubble is a MUCH larger bubble than the sub-prime bubble.
The question is, what happens when it bursts?
Does the federal government have the funds to bail out the system?
What would be left standing?
By the way, the entire US Government is now living on credit. The privateers in charge plan to live extremely well on what they have taken so far and leave our children to pay the debt.
Unfortunately we are a consumer driven society and this is what happens to a lot of people, granted the price of fod has skyrocketed along with the price of GAS.
bornfreemen
"We should have seen this coming, the Bush Administration passed laws a few years ago stopping credit card debt from being forgiven in a bankruptcy court. We must pay it back on a payment schedule."
So not true. See my post about 14 back. Chapter 7 wipes the slate clean and then Nothing Exists.
Also:
luckylefty wrote:
"Escuse me…these CC animals are the same ones who spent $40-$60 million on Congressional Bribes to get Chapter 7 eliminated..."
Lucky, Chapter 7 is alive and well just more complicated and thus lawyer expensive. But after it,
Nothing Exists.
"Everybody knows that the dice are loaded,
everybody rolls with their fingers crossed,
everybody know that the war is over,
everybody knows that the good guys lost.
Everybody knows that the fight was fixed,
the poor stay poor and the rich get rich,
thats how it goes
Everybody knows"
Leonard Cohen
"Everybody Knows"
Lately the government has pushed the 'core inflation rate'. Inflation without food or energy. This of course is not the inflation rate for regular people. In addition, the calculation of inflation is not a comparison of the price of a basket of goods as it was before Clinton. Now they do a calculation for a change in utility. A computer that costs twice as much but has a 4 times faster processor is going down in price for the new inflation calculator. Look at the value of the dollar today it is way down vs almost every currency. Given or take, about 40% down.
The DOW is about where it was when Bu$h the inferior took office, but the Dow continues to change companies replacing weak with stronger companies add in the drop in the dollar and that measure of the economy is much worse than stated.
The US has about 1% of its work force in prison and perhaps another 1% in other legal process that keeps them from working. European countries usually count these kind of people as unemployed. Here they don't exist for employment calculation. People forced into early retirement or part time are also not accurately counted. There can be large swings in actual economic conditions without these numbers showing it.
My major point is that the way the calculations for economic data has changed over the years and is completely different than most other countries calculate these numbers, but the MSM just says here is the government announced number - put on a happy face - the fact that you and hundreds of other people have lost good jobs is an isolated incident.
We should have seen this coming, the Bush Administration passed laws a few years ago stopping credit card debt from being forgiven in a bankruptcy court.
We must pay it back on a payment schedule.
Sorry America, if you did not know,I told you, we have been hijacked , and they have been planing all of this for over 20 years, 80's and 90's.
And Ronald Reagan started it, Republicans and Democrats have been selling Americans out slowly for the last 25 years.
And here we are.
BornFreeMen
This is a really sticky wicket. I use c.cards instead of cash, but the cash is in the bank and I don't overspend to buy alot of useless garbage. Haven't paid interest since I got a card. Unfortunatly, most people are like adolescents over 18 who think they are adults and can now do anything they want. The fascist state relies upon this psychology and reinforces it at every opportunity. By the time
the victims realize they can't consume without consequences, it is way too late and they are on the merry-go-round for life. Then they get a lecture from some wealthy politician who has no idea what the price of gas is because he has "people" who do that sort of thing for him. This is another side-effect of no-child-left-behind which robs the populace of the ability to reason this stuff out. As soon as they re-instate prayer in schools, people will start thinking they can "believe" their way to prosperity...if they don't already.
Good Morning America had a piece this morning about how great it is to get a second job to make ends meet and "its not as hard as you might think!" (Diane Sawyer makes it all sound so cozy...hey...why not...she's got her's!) All you have to do is get rid of your actual life and work all the time.
People who pay their cards off each month and avoid interest charges and late fees are called "deadbeats" by the cc companies. I have even heard of some of these people having their cards revoked. Notice they never take your card away if you owe them alot and can't pay...they just let the charges pile up until they can take it all...house, car, etc.
Every time the fascists, oops, I mean republicans, get into office they figure out new ways to loot the nation of its wealth. Reagan's boys robbed the savings and loan. Bush the first hit the banks and now, with perpetual war on the table, they just "appropriate" straight out of the treasury.
There is more to life than things! Stop buying into the instant gratification illusion! You will never be satisfied and you will ensnare yourself in the unfathomable ocean of suffering.
All we need to do is elect McCain to protect the tax cuts for the rich and add a few more for good measure. Then it just takes a little patience until the trickle-down theory of Ronnie Reagan begins to work and we will all have plenty of money for everything we want.
While we are waiting, it might be wise to cut up some of those credit cards and live like a church-mouse on bare necessities while paying off the remaining ones. Tell your children to get a job and do the same thing instead of expecting some miracle to allow them to continue wasteful spending that they cannot possibly afford.
Except for a small percentage of people that have suffered disastrous situations, most should look in the mirror for the financial mess they are in and not try to blame it on the greedy and corrupt lenders. Getting into debt is exactly the same as accummulating assets only in reverse, you start small and it eventually becomes a good sized sum.
I believe it was Sallie-U Kent that suggested after the crash we should have FDR programs as CCC, WPA.and PWA, which is certainly what will be needed. However, at that time many people were used to hard work with tools and machinery. That is not the case with the workers of today who are more inclined toward computer and office jobs.
there are some great posts here,but i can't resist adding my 2 cents-back in the day "bubbles" was a stripper's nickname,now its our financial way of life,and yes,biff,since deregulation permits anything to be transformed into a security,albeit an opaque one,there is more than one kind of bubble.having said that,let me add that this country was built on slave labor and land fraud.today it survives on cheap labor and securities fraud.over the last decade productivity rose 18 % while wages rose by 2 % what does personal responsibility mean under these circumstances ? who is kidding whom? if we wrote a stripper in for president,she would be the first KNOWN stripper to hold that office.i echo richard pryor when i ask "how long,will this bullshit go on? "
I'm currently putting 40% of my gross pay away to the 401k. They have to count that.
"And I don't put much faith in our govt. stats. How do you get a savings rate without counting 401K's?"
Details?
GwNorth August 11th, 2008 8:50 pm
Could be. Though I don't think there are 4 to 5% discouraged workers out there. Could be wrong, its worse than its been since 74 and I'm sure it will get worse.
Lets say then that its about 9 or even 10% unemployment. Thats still far away from the 18% start and not even close to 25%.
My point is we've got a long way to go till a depression. A long way.
That doesn't mean there won't be a lot of pain. And I don't put much faith in our govt. stats. How do you get a savings rate without counting 401K's?
Loved the Irish bit. Thats why I'm here and not in Ireland. We left! (well. my great,greats did)
Dear Danny.
Please try to learn how to use a comma.
How much money you have is what you have in your wallet...NOT the damn credit left on your credit card. Bubba...if you are not paying off your balance EVERY cycle..you are living outside your means. On the other hand....dying with all your cards maxed out might be dishonorable...but what the heck...it's the American Way. Whoever said Americans were an honorable people.
Veteran '66-68
" Learning how to handle money comes either from having a family that handled money well, or, making mistakes and learning from those mistakes. "
Or from mandatory classes in the public school system. I favor that.
Some people are victums of unforseen circumstances, such as a catastrophic illness in the family. Some families have more than one catastrophic illness, some are victums of financial exploitation, or fraud.
When those people have trust funds or have inherited homes and stocks (through no "responsible" behavior of their own). The groceries and medical bills are paid.
When the average wage slave has a catastrophe sometimes their first recourse is borrow from usurous banks. Next: sell their home or possessions to pay debt; then comes bankruptcy. Now with the laws changed and their home's value plumeting many are caught in a trap.
Why should some people think they are better than others who have nowhere else to turn but the usurous banks? Learning how to handle money comes either from having a family that handled money well, or, making mistakes and learning from those mistakes.
I wish those who advocate "Responsibility" could see that nothing in life is guaranteed, and someday it could be their turn to suffer catastrophe no matter how "responsible" they are.
well boo-hoo. people get themselves into debt and then start whining. i've been using a citibank MC for the past 8 years. never paid one cent of interest, however the cash back feature gets me at leat $200/yr back. take that MC.
credit used wisely can work for the consumer. fortunately, for me (and the banks) most consumers are not wise.
BANKRUPTCY, that's the ticket! Get it while you can!
Many people think that recent changes in the law make it no longer possible. It is just more expensive because they made it more complicated and thus you need more lawyer hours. In California a good BR lawyer costs about $2000. and the court costs are about $500. Twenty-five hundred is not a lot to get out from many thousands of dollars of cc debt. Most people avoid filing it until they can no longer afford to come up with the cash as the lawyer requires it in advance. Hey, if your credit is still okay you can even get a cash advance to do it. If not then start selling things you don't need and raise it. I raised mine on e-bay.
Read the laws for your state and plan it carefully. Learn how the system works and work it to your advantage while following the letter of the law. If you do it six months before filing you can sell everything you won't be able to keep and pay off your student loans (which can't be wiped out).
It varies by state but the equity in your home is safe up to various amounts for an individual or couple and depending on your ages. Research it in your state by Googling "California (or Kansas or whatever state) bankruptcy exemptions." Sell your expensive car and buy one that gets good gas milage and isn't worth over about $3,000. If you plan it carefully and take your time you can make out like a bandit. I did. I skated on over $125,000 in combined business and personal credit card debt and ended up with my 1995 Nissan pickup, my wife's Merc. Tracer, all our personal and houshold items AND all the equity in our primary residence. Our credit is shot but that is a good thing. I love living on a cash basis. It's like growing your own vegetables. Everything tastes better. The day we received the final decree was one of the happiest days of my life, second only to when I got my 4F classification during the Vietnam War, (but that is another story, Little Cockaroach.)
"Freedom is another word for nothing left to lose." Do your homework and beat the bastards at their own game, because, when all is said and done, Nothing Exists.
"The US does not count discouraged workers, the long term unemployed, self employed Contracters, or transients "
This is total BS. The labor department publishes it's methodolgy on it's website. Nowhere in the link provided to "support" this statement do they actually tell you how the employment survey works, or make any other specific references to it.
"Unemployment is about 4 or 5% higher than advertised. Inflation is also 4% or more higher than advertised."
Shadowstats is in the business of selling a newsletter. There is no good reason to believe his stuff. If you have any I.m all ears.
We need to get a usury law. When I was a kid it was illegal to charge more than 12% in Wisconsin. It was great living in a state with few pawn shops, no check cashing ripoffs, no casinos, and no lottery. During this time Wisconsin government was arguably the cleanest in America.
The so called reason for allowing infinite interest was to allow more people to get credit. Bad credit risks do not need credit. They need to be told up front that they are borrowing too much.
When interest rates were quite a bit higher, I remember my credit card interest rates being 18-20%. Whenever I got a little extra $, I'd pay one off, and have always kept debt to about $3500-4000. I take the highest card and get one of those NO INTEREST deals, and pay it off; but since I still find myself using credit cards (3), one inevitably goes up again. What bothers me is that now that banks pay less than 3% interest, it makes NO sense that the interest on most credit cards still remains in the 18-20% range.
I had a recent situation where I was heading out of town so sent the check early. It was posted on June 2. When I got back I saw they had counted that payment as one for May, even though that meant TWO were clearly posted for May. I rushed a 2nd June payment knowing these imbeciles play their little bureaucratic games, as if the rules must be followed to THEIR letter of the law. (Except for the very rich, these are hardly times where the customer is catered to, or "always right.") The 2nd check came in one day after the due date. I get the July bill with a $39 late fee, and the interest free offer rescinded. I called to speak to a rep figuring logic alone would dictate that since I'd made TWO payments in June, the penalties did NOT apply. But I managed to get some authoritarian type on the line who claimed she was a manager and she adamantly refused to give me credit! Or take off the late fee, etc.
I ended driving one hour to the bank the card was issued from and speaking to a reprentative. So apart from justifiable anger, I lost 2 hours of time and gas. I did get satisfaction, but as soon as my CD is mature at this bank, I am expunging ALL accounts with them. This is not the first time I have had problems with them. They bounced a check because they didn't clear it in time when they had 5 days to do so. I almost had a legal problem from this alone. You know that if YOU write a check, those necromaniacs will have made it theirs as soon as it was in their possession. This BS about waiting 5-10 business days to clear a US check is just another ridiculous protocol.
Bottom line--how DARE these banking institutions lose money when they pay us 2% or less, while bilking credit card users to the tune of 20% and more (fees/penalties)? What kind of odds are these. I believe in profit, fair profit, for a service; but this constitutes USURY. And the fact that BANKS were bailed out in this credit pyramid scam, rather than those positioned to lose their homes, is one of the most sickening outrages of our times. (In the category of finance. The other outrages like war without just cause, and the way those at the helm are surging full steam ahead towards the end of oil, rather than playing deliverer and showing the way towards alternative fuel sources, well, there are all kinds of scores for the HELL they've been working so assiduously to design for others).
Unemployment is about 4 or 5% higher than advertised. Inflation is also 4% or more higher than advertised. http://www.shadowstats.com/ has some free stats. They make a living telling subscribers the accurate financial statistics for investment purposes.
These numbers are more in line with my experience. Even being charitable the government numbers are calculated to make the 'correct' result, some of the not counted that are counted in other countries are the enormous number in the legal system, long term un or under employed and all those who are medically unemployed because nobody will hire someone with past health claims for a position with benefits. Hard for people over 50 to get good jobs too.
The blame the victims is old school.
During Th eirish Potato Famine, the landowners in Ireland were sending thousands of tons of food outside of Ireland to Britain and the Continent. This was mutton, butter and the like by the boatload simply because they could get a better price for it in Britain or on the Continent.
The irish were left to farm marginal lands as the more productive lands were closed off for raising sheep and the like.
The blight hits..the people starve. The Newspapers and peoples sitting around their dining room tables eating off their sterling silver, blame the Irish and claim they are lazy and stupid.
PK
Thomas More.
Your comparions of the Unemployment rate today to that of 60 years ago are invalid.
They changed the methodology.
Not only are "discouraged workers" not counted but they do a guesstimate on jobs created. They assume that if a person is long term unemployed, that he somehow created a job for himself and thus can be taken off the count and be marked as employed.
The US does not count discouraged workers, the long term unemployed, self employed Contracters, or transients (People whi lose a job and move out of state looking for a job are dropped from the rolls).
http://www.timesizing.com/2uedefns.htm
While an older article you should reveiw this as the labor department does have several grades as how they measure unemployed. It also points out differences in Canadas and Americas systems wherein if the US used our system the rates of unemployed would be higher.
The U3 is what is released to the public for consumption. U6 which is much broader shows that the U3 understates unemplyed by about 100 percent.
They pull the same type of thing with the deficit wherein they include the SS securitysurplus in with revenues and then borrow against it.
They do the same thing with the inflation rate which is likley twice the posted rate. This at the behst of Greenspan who suggested that the basket of goods methodology flawed because if the price of steak went up too much people would substitute with hamburger.
Be very wary of "official Government Stats"
pk
RE: "Let's face it: Americans have become dumb and dumber. Anyone using a credit card to pay for something that they can't afford deserves no sympathy. No one "deserves" a nice home, or a nice car or anything else. Get off your butts and work for it."
You shouldn't be so judegmental, it makes you look closed minded.
I've worked my entire life since I was 15 years old.
To make ends meet I am forced to use credit cards for health care. Health care sucks in this country. I've paid for insurance my entire life and a lot of good that does when a loved one gets a chronic and lifelong sickness the insurance won't cover!
It is desperate out here and about to become something this country hasn't seen since the 1930's, and you blame the victims. How sweet.
Families are using credit cards for food, medicine, medical care, clothing, gas etc., because they have been screwed out of the money they deserve from productivity increases. Somewhere along the line companies stopped paying workers for productivity increases like they once did. Thanks to economists no one raised the issue. Now it's probably too late. Increasingly people are too broke to live today and credit cards are the first line of defense against hunger and the streets. Cards will be maxed out and there will be no money to pay the banks. Next people will be blamed for being poor. I know we're not in Kansas, but it doesn't seem we are in America anymore either.
Meister Eckehart, fantastic name. Can't wait to see what you will say.
"Combined with the subprime losses, such a credit card nightmare has the potential, experts say, of bringing down the entire financial system and global economy."
Individual credit card defaults combined with corporate credit defaults, along with "credit default swaps", will undoubtedly bring down the entire global economy. We are looking at losses in the $$TRILLIONS and still don't know who is holding all this debt.
The $hit hasn't even begun to hit the fan!
We can thank Ronald Reagan and a corporate, kiss-ass Congress for Deregulation. We The People are now covering the losses of those corrupt, money-grubbing, risk-taking institutions that according to Congressional wisdom, "cannot fail".
I had to laugh when I came across the phrase in the 4th paragraph: "it's not our fault".
Not our fault? Gee, I can't remember the last time someone MADE me use my credit card.
Let's face it: Americans have become dumb and dumber. Anyone using a credit card to pay for something that they can't afford deserves no sympathy. No one "deserves" a nice home, or a nice car or anything else. Get off your butts and work for it.
Cavedweller ("When they have nothing to lose, the revolution will start. It's sooner than most people think") Such a logical and refreshing sentiment. HOWEVER. Some of us have been predicting "when the revolution comes" for some time now. Plenty of serious reasons and plenty of Americans standing around staring into space at the proverbial cash register, with credit card in hand. GW Bush told us to go shopping after 9/11 and that's precisely what we did. Something will implode "sooner than most people think" but I doubt that it'll make any sense.
RE: "They saw this shitstorm coming, hence the 2005 laws were made."
Can the 2005 laws be repealed, or modified with new laws, just like the 2005 law reformed the existing law?
If not I gotta tell you just to make ends meet with 2 kids and 1 paycheck I am but 1 paycheck away from the streets with thousands in credit card debt on top of 2 mortgages and a car loan. It'd be sweet to walk away from this shit... push comes to shove thats what I'd do. Womder how many others are like me? If enough of us walk at the same general time, heh I'd even take off in the car and just catch me if you can...
seditious said,
"Now an individual can't wipe out debt and start clean, but a federal bankruptcy judge will make you pay back that debt on "reduced payments" - ie: whatever the court thinks you can afford after bankruptcy. "
Actually, you can wipe out debt and start clean if you file Chapter 7. Certain items are listed as exempt (home and property, car, etc.). But it's true that the laws have been tipped in favor away from the debtor. And if you file bankruptcy and receive a discharge, your bills are gone (with the exception of student loans) but your credit is damaged for ten years. You start from scratch, but if you have to borrow any money (say, to purchase another car) it won't be easy.
SallyUUKent August 11th, 2008 5:28 pm
Right now our unemployment rate is around 5%. In the crash it was around 18% to start and 25% at its peak.
We aren't that close are we? Financial problems yes. unfettered business causing problems, yes. A bunch of their ies were swallowed, yes. But we aren't close to a crash I'd say.
sun827 August 11th, 2008 5:34 pm
This advise I gave two friends trying to help them out of a similar problem. It worked for them, took a few years though. Doesn't mean it will work for you, but here goes.
1. cut the cost of your debt as much as possible. As Canuckchuck suggested, call them up and tell them you have a better offer on interest rates, but don't want to move, will they lower yours so you don't have to.
2. Look around for card offers that will give you better rates if you transfer your account.
3. Pick out the lowest balance you have or the one with the highest rate and concentate paying it off.
4. Try and consolidate your debt if you can in two or three accoubts to allow concentration of payment.
5.(this one only if its getting critical or for hospitals) Occasionally call one of them up and talk to them about a settlement of the debt. Or get a trusted friend to do it for you. you can use "I'm about to be forced into bankruptcy and I don't want to, is there any way I can settle this debt with a lump sum payment?"
6. Remember, all my advise is worth less than you paid for it. I'm sure some of the brighter people will have some better suggestions.
sunset 827, sorry about your string of bad fortune. I hope your injury is healing. You seem to be a very strong person. Take care of yourself.
revengegirl wrote: McMansions of today are set up to be multi-family slum dwellings of the future.
Reminds me of the scene from Doctor Zhivago. He comes home from WWI to find his family living in a small room of their McMansion now occupied by two dozen families.
The building commissar asks him what he thinks of the arrangement. "More just," Zhivago says.
The best thing we ever did is to live without frills and pay down our credit cards after we were finished raising and educating the kids. We were not into consumption, but basic things cost too much at certain times. If education and health care were paid for or reasonable, there would be fewer people in trouble. If we had a policy to provide housing at affordable prices, that would help too. (The post WWII GI bill was a model for that.)
There is a certain level of entrapment, but some people collude in their own downfall because they value excess. You cannot completely protect people from being idiots. You can have truth in advertising laws, but you cannot force people to pay attention. You can advise people to cut up the credit cards they get in the mail, to live wisely and buy what they need.
By the way, I wonder what rich people do in all those bathrooms.
The most profitable credit card customers are those who are the least able to pay back their debts.
Sound familiar? See "Maxed Out" , a documentary on business as usual.
Actually, it IS possible to live without credit cards (unless you are unemployed and have NO other way to cover your expenses until you have an income again). You decide (and abide) that if you don't have the cash, you don't "need" the item. If you're traveling out of town, you can send the hotel a check that will clear your bank before you arrive instead of using a credit card to guarantee payment. You can use public transit in most cities rather than rent a car.
It is absolutely freeing and absolutely great NOT to receive those bills every month and, considering today's lack of financial services oversight, never know if the interest rate may have doubled.
I lost my job due to a store closure. I received unemployment for a time while looking for work. When I did find a job it paid considerably less than what I made before and it wasn't long before I was using credit to pay bills and eat. That worked for a while until I was injured and couldn't work. Out of work again paying for medical and living bills the debt grew. Unfortunately when I was working again it was in construction and there were long periods of no work and no money coming in. The interest rates went through the roof and all the related charges started adding up. When money was coming in there was barely enough to live and pay bills and no chance of paying them down, just enough to keep them away. I own an 8 year old car that I paid off. I don't have a ton of clothes or electronics. I don't eat out and I don't go to the movies or out drinking. I don't have a drug habit and I live in a tiny apartment. about 2% of my total debt is frivolous spending and most of that was years ago. I don't want to walk away from this debt. I don't want my credit destroyed, but I won't play a rigged game. rates of 18-28% were unjustified and only made it impossible to pay.
So what choice do I have?
We are seeing a credit crunch the likes of which hasn't been seen since just before the Big Crash of '29, and if we aren't careful about reining in the rampant greed and overspending on credit, then we're going to see yet another crash the likes of which is bound to be far worse than the one that plunged us into the Great Depression.
The warning signs are all there. If people don't heed them and do so soon, then we're in for a rude awakening when the Big Crash happens this time and it affects the entire global economy. You think that we've got a lot of warfare going on now? Just you wait - the fight for scarcer and scarcer resources is going to be far worse than we could imagine. Water will be the next resource we fight over, and it's already begun with the Great Lakes Pact to prevent the thirsty south and southwest United States from taking our Great Lakes water to slake their collective thirsts.
And that's just Round One of the fight for water. Of course, if the polar ice caps melt due to global warming and the ocean levels rise, then de-salination plants could be built up and down every coastline to provide water to the thirstier parts of the world, which could certainly help reduce the levels of the oceans, but I don't know by how much or whether it would even make a significant enough dent to prevent extreme flooding of low lying coastal areas.
But getting back to my original point, The Big Crash is coming. It's not a matter of "if", it's "when", and we'd all better be prepared when it happens. Maybe we can reconstitute the old FDR programs like the Civilian Conservation Corps, the Works Progress Administration and the Public Works Administration to help rebuilt our country's crumbling infrastructure and to rebuild and refit it to suit 21st century needs.
If FDR could do it, then why can't we, only on a 21st century scale and to address 21st century needs?
"We should all just be able to borrow money for free, right?"
Well that depends on what you mean by free. We live in an inflation-based economy which necessarily creates a time-value to money. Money effectively doubles about every 10 years, so if I pay back the money in 10 years with no interest, I'm actually only paying back about half of what I borrowed.
Then there's the cost of labor, production, record-keeping etc. with granting, tracking and managing a loan and all related payments.
Then there's opportunity cost - if I loan you $10,000, then that's $10,000 I don't have in case another, maybe better, opportunity would come along.
Usury, in the sense of exorbitant interest may be immoral to some, but some entrepreneurs manage ROI in the hundreds of percent, and they aren't complaining about paying too much for the opportunity.
What needs to be focused on in this discussion is not the unwitting borrowers of credit but the private interests that reap the spoils. Some have tried to assert that a publicly owned bank wouldn't have to charge interest but that's not realistic. A healthy financial system should make profit and foster growth, and if the benefits from that were equitably cycled back for common good than the system could be balanced and few would complain.
The problem is not interest, it is that the system is being largely leveraged for the sake of a few private gains at the expense of the greater good - it's bass ackwards. All accountability to and responsibility for the common good has been successfully diminished to near oblivion. Until the majority of common folks figure the system out, expect more of the same.
Credit Card Cos. are "The Boot On The Neck" of the "Reagonomics" philosophy.
The irresponsible behavior of the CC companies in encouraging (through advertising and credit card offers) consumer over extension is pretty obvious. Consumers I know thought the value of their houses was going to stay high and bail them out. Did you expect this contraction? Wall Street seemed surprised.
One example of consumer entrapment: a friend of mine had a line of credit from his CC at 9% which had $10,000 on it with no late payments. One fine month the CC company upped the rate to 25% with no warning. So this "responsible" consumer was suddenly in big trouble.
"are you suggesting that the billions of dollars spent on advertising are wasted?"
Spent by credit card companies? No. The advertisements are designed to get you to obtain and use the card issued by a particular company. My original question remains.
re 4:02pm
are you suggesting that the billions of dollars spent on advertising are wasted?
"We get the 'stern lectures on personal responsibility'."
Are you suggesting that many of those with huge CC balances were not irresponsible in racking it up?