March 18, 2005 – Democracy: What Exactly Are We Exporting?
Once Again, I begin a Rant with apologies for the delay in time since my last Rant. Well, mea culpa, mea culpa – but that’s what happens when I do this in my spare time. But, I could not let much more time go on before I spoke about the whole hypocrisy of George Bush, and anyone else for that matter, talking about how our nation and its sad excuse for Democracy is some sort of model for the rest of the world. The thought of our Federal Government being a role model for others to follow is almost be funny, if it was not so sad. Freedom, or the yearning of people to be free, does not necessarily equate with the system of government currently on display in Washing D.C. Indeed. I could argue that the evidence tends to show that our “Representative Government” is anything but. One only needs to look at some recent shenanigans in Congress to realize that the only people being served, other than those asking for super-sized fries, are those very rich special interests who have lined the pockets of our elected officials.
You know, in a sick, twisted sort of way, it is almost satisfying to watch all of those misguided Red-Staters who voted for George Bush and his Republican Rangers panic in disbelief as they see his true colors. Surprise! They may support the culture of life, but first and foremost, they also support the culture of money, pushing to cut farm subsidies, creating a social security crises while Medicare, a true crises, goes ignored, all the while working to pad the pockets of the rich and elite. But it is not satisfying, because slowly but surely, these people are being screwed out of the very programs they thought George Bush would protect, and the values they thought were shared. Not to say I told you so . . . Nothing speaks more loudly to the true values of the Republican Party, and indeed the wholesale pawning of our government, than the Bill proposing amendments to the Federal Bankruptcy Law. In my opinion, the proposed amendments do nothing more than reward predatory lending practices, and start down a path towards a financial debtor’s prison.
First, let me tell you that unlike most American’s I do not carry any revolving debt except for my home. (I had a car note for a while, but paid it off early.) All of my credit card bills are paid in full when they come due, and I do not buy anything (other than a home or a car) that I cannot afford to pay for within 30 days. I also get almost daily offers for additional credit cards – and could have hundreds of thousands of dollars in credit if I chose to. I am not like most Americans. But, unlike Republicans, I care about those who are not quite like me, and worry about those who are not in a position to protect themselves, and who cannot afford to line the pockets of their Senators and Congressmen.
Fist, I know that folks abuse the Bankruptcy system, and cheats and deadbeats should not get away with being cheats and deadbeats. But, the proposed amendments have been written in a way that could result in many middle class families, facing catastrophic financial change and medical hardship, getting screwed. Simply put, there is not a means test before you can covert to a traditional form of bankruptcy. And folks who have a drastic change in circumstances prior to filing bankruptcy may be stuck between the life they once lead, and the reality they currently face. Consider the following scenario:
“Basically, if the combined gross income of your family is greater than the median family income in your state, you may be required to file a Chapter 13 repayment plan where you repay a percentage of your debts over a 36-60 month period, and not allowed to file a traditional Chapter 7 bankruptcy where your debts are eliminated.. . . there is a potential risk that middle income family’s need to consider. Over the last few years many middle income families have purchased or refinanced a home, and have a significant mortgage payment. A large number of these families also have substantial credit card debt and automobile debt. The mean’s test looks back over the last 6 months income, when middle income families may have been earning more than the threshold amount. So long as the economy is improving and your health stays good, no problem. However, if you are subject to the means test and you lose a job or your wages go down, or you lose income due to medical problems, the means test may force you to pay a higher monthly payments in a Chapter 13 plan than you are able to afford. This could lead to wages being garnisheed, repossession of your cars, and foreclosure actions on your house.” See http://www.ws5.com/bankruptcy/
Of, if you happened to finance a car within 2 ½ years of filing for bankruptcy, or made any other major purchase within 1 year, you must pay the full balance owed to the creditor to keep the item. This is true even if there is a lot of mileage on the car, of the item is worth only half of what is owed. Or, if you were charged an excess interest rate on the amount financed. Basically, the bill goes out of its way to protect those lending money, and assumes that those who are looking for help are deadbeats. Now, that may be true, but, and maybe it would not be so bad, if the Bill itself did not ignore one of the largest abuses used by the wealthy to shield their assets from creditors – it is a little something called asset protection trusts. In a nutshell, folks with money use these trusts to keep their money out of the hands of creditors in the event something bad happens, and apparently, that is OK, But, owe money and be poor, well, you are assumed to be a deadbeat and we are going to make sure you pay. Of, the people, by the people and for the people . . . makes me want to hurl.
Even worse, is the fact that the folks pushing this bankruptcy reform are the predatory lending companies who lend money to those who they should not be lending money to in the fist place. These companies have the Federal Government in their back pocket. Credit Card interest rates are out of control, and unlike almost any other lending practice, are not subject to state usury laws. And the Federal Government does nothing. Credit card companies can do just about whatever they want to you, change the rules as they go, increase your interest rates, and you have to say “thank you sir may have I have another” if you want to keep on using credit in our credit dependent society.
They have the decked stacked against you, and you may not even know it. For example, did you know that if you are one day late on one credit payment with one creditor, all of your credit cards can be affected? More and more credit card companies are adding clauses to their customer agreements that provide for “universal default”. In a nutshell, one mistake with on company, and all of the credit companies team up together and nail you to the wall. Generally buried in the fine print of your credit agreement is a clause that says that if you are late on any payment to any lender, the interest rate on the credit card could shoot up. Forget about that lovely low interest rate you think you have. Up it goes to the max. This change can occur even if you have never made a late payment on the credit card in question. Studies have shown that more than one-third of all card issued have used the universal default rules to jack up the rates on payments for customers who paid late on other lender’s cards.
Now explain to me how, if credit card companies can do this, they need even more protection from our Federal Government. More importantly, how responsible are practices such as these for pushing folk into bankruptcy? It is really great what millions and millions of dollars in campaign donations can get you. Let me get this straight – credit card companies are not subject to state usury laws, they get to share information and increase rates based upon your experience with other companies, they send offers of credit out like they are dealers trying to get junkies hooked on a new drug, and then they come crying to the Federal Government saying they need protection from those mean deadbeats credit card junkies who now cannot pay their debts. Talk about playing the system for all it is worth.
At some point, credit card companies need to take responsibility for their actions. They choose to lend individuals with bad credit, and price this risk into the interest rate they charge for the credit granted: that is part of the risk associated with the deal. They do not get to charge someone with a bad credit history a 20% interest rate, and then act surprised when this person defaults on their debts. Why is it that the only person held responsible here is the poor schmuck who is stupid enough to accept the credit card? Both the dealer and the junkie are guilty in a drug deal, as are john and prostitute in the world’s oldest profession. So to are the credit card companies and the defaulting cardholder. Loan defaults are the cost of doing business.
If there are any criminals here, it is our elected officials who are too busy stuffing their campaign accounts to recognize that they themselves have become nothing more than shills for the men with money. Maybe all people want to be free. And maybe all people want a government of the people, by the people and for the people. I know that I sure would like one. Before we go nation-building based upon our own image, perhaps we should look in our own back yard to see the cesspool surrounding our own government. Let us clean that up before we start telling others how to manage theirs. Government of the people, by the people and for the people . . . one can always dream. Now someone get some scissors. I need to cut up some credit cards.