Democrats & Liberals Archives

The 'Credit Or Debit Issue'

The one thing the fierce opposition to George Bush’s Social Security scam has proven, is an unjust war thousands of miles away may not motivate the American electorate to outrage, but self-interest and a threat to their cash flow, will. So, if I were the bad toupee wearing Frank Luntz of the Democratic Party, I have just found the perfect ‘bread and butter issue’ courtesy of the Republican Party, and just in time for the 2006 Mid-Term Elections.

Even with infrequent attention paid to Business headlines, most would know that bankruptcy filings are on a sharp rise in this country. Googling 'bankruptcy' for this post, the search results detail the staggering state by state statistics that confirm such a desperate measure, along with personal stories describing a familiar mix of unemployment, credit card debt and/or mounting medical bills due to catastrophic illness.

Yet, it should come as no surprise that the credit card companies, banks and retailers holding much of this debt, have now spent millions lobbying the Republican controlled Congress to finally rescind this important, only remaining option for American consumers in dire straits - and will probably prevail.

20 years ago, fresh out of college, I found myself not only with significant government student loan debt, but also with personal loans from boarding school tuition owed to my father's employer's credit union. As my father had recently retired and was on a fixed income, I inherited the debt as a whole and immediately became the focus of aggressive collection efforts. I took the option of filing personal bankruptcy, which eliminated the personal loans, but was still on the hook for the government loans, which I paid off 6 years later.

Although, the seven years this bankruptcy was an impediment staining my credit rating, my story would be of benefit only to credit card companies and lenders insisting most bankruptcy filings follow this abusive and exploitative practice of avoiding financial responsibilities.

But, it was this widely cited study by the journal Health Affairs that shines a revealing light on what is really the root cause for most bankruptcy filings currently.

One could only hope then that our elected officials in Congress would be compassionate and use common sense, when deliberating on any reforms to our bankruptcy laws. Unfortunately, as detailed in this recent New York Times' article on the fight over the proposed legislation in the U.S. Senate, the credit card companies, their money and their lobbyist have succeeded in extracting such empathy from the necessary number of politicians.

The fact that just enough Democrats are also doing the bidding of the credit card companies (and just when I thought I knew Joe Biden), indicates current campaign finance reform laws are not sufficient and our party can no longer deny the onerous influence of special interest groups.

For now, the bankruptcy 'silver bullet' seems to be Canada's mix of actual job creation and universal health care. Yet, here in America, it helps Democrats by mirroring the Republicans craven effort to 'fix' a vital financial 'safety net', by manufacturing a crisis that does not exist. This can (and must) be a potent issue on the top of DNC Chair Howard Dean's 'talking points', more convincing evidence when making his personal Red State pitch to now wary and betrayed Bush voters.

Better known in Luntz-speak, as the new 'credit or debit issue'.

(For more information, see the 2.28.05 Progress Report on Consumer Rights)

Posted by Bert M. Caradine at March 5, 2005 2:58 AM