U. S. CITIZENS
"It is well enough that people of the nation do not understand our banking and monetary
system, for if they did, I believe there would be a revolution before tomorrow morning."
Henry Ford Founder, Ford Motor Co.
Our elected representatives in Washington, D. C. are in the final stages of hammering together a law that will close the only escape hatch for those trapped in debt and retroactively turn existing and future credit card contracts into instruments of lifelong bondage.
Our professional politicians (of both major parties) are acting to help some of their major financial backers -- the great corporate money lenders who have in recent years pressed tons of "free money" on the young, the sick, the unemployed, the ignorant, and the gullible.
In future, low- and middle-income citizens whose income lags farther and farther behind a crushing load of debt generated by interest rates of 18 to 20 percent a year, will, as virtual indentured servants, permanently owe a portion of their income to the banks and will be unable to go into bankruptcy to escape debt and start afresh, the way an insolvent corporation would.
It is common for highly paid workers and thrifty, hard-working people -- including those retired on adequate incomes -- to scorn those who have fallen into the credit trap, but the great majority of people today who declare bankruptcy do so when they lose their jobs, get a divorce, encounter high medical expenses, or for some other reason suffer a financial loss.
In the past, personal bankruptcy has provided such citizens a legal and honorable escape from an impossible situation. Under the new law, there will be no legal or honorable escape, which will put debtors in a psychological pressure cooker.
Here is some background information on credit cards gathered from the American Banking Association, lawyers, and credit counselors by reporter L. Stuart Ditzen, published in The Seattle Times (20 September 1996). At the time Ditzen was writing, the ABA was becoming increasingly concerned about rising rates of credit-card delinquencies and personal bankrupcies.
"About 17 percent of all disposable income in America is being spent to make payments on installment-credit debt."
"Nonprofit counseling agencies saw 827.000 people last year with an average debt of $18,305. The volume of clients is up roughly 20 percent this year."
"At the beginning of 1996, [the ABA] predicted an all-time high of a million bankruptcies this year. It has recently revised that projection to 1.2 million."
Banks commonly press credit on those heavily in debt by sending them checks and credit cards worth thousands of dollars in the mail.
In the past, people who filed for bankruptcy accepted a loss of credit for 10 years. Now, "fresh bankrupts" are regarded as prime prospects by lenders and often find new checks and credit cards in the mail, inviting them back into debt within days of filing. (The new law will get rid of this messy situation by simply putting debtors into permanent bondage to the banks.)
Americans use 400,000,000 Mastercards and Visa cards, plus "countless gas, phone and store cards -- for everything, including rent and groceries."
We often speak of those who live on credit cards as being "addicted" to their habit. It seems equally fair to say that our Senators and Representatives are addicted to the money given them by the banks, and that the banks themselves have become addicted to their usurious interest charges.
Meanwhile, believe it of not, the Federal Reserve Bank of New York moved to save multimillionaire speculators from their bad investments and likely bankruptcy. (See article.)
See SECRET HISTORY OF THE CredIT CARD
R. W. Mann
[Copyright 1997,1998 by R. W. Mann. All Rights Reserved.]
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