Forgive all credit card debts...

[kentuck]

and watch this economy take off.

If we could get a Democratic majority in the House, that would be something to seriously consider. It would also be a payback of sorts from the big banks to the people that bailed them out.

No doubt, it would put a lot of new spending into the economy. There are few consumers that are not burdened with credit card debt. It was the substitute for wage increases for 20 years. People could pay off their credit card debt with another credit card or they could pay off all their credit cards by re-financing their homes. Those options are no longer available.

Since employers will not hire and many will not give any pay increases and they are paying very little, if any, taxes, this would be a fair proposition for the people.

Also, as I have stated elsewhere, corporations that move their businesses off shore for cheap labor should be declared persona non grata and not eligible for the US tax rates or favors offered by our government. They will need to negotiate their taxes with the country where they have decided to move. Perhaps they can get better rates?

On top of that, if they want to bring their cheap products back into this country to sell, we should add a 25% tariff on them. That would level the playing field with most of our trading "partners".

Furthermore, companies should be given a choice. Give your employees more pay or pay more income taxes. Preferably they would choose to pay their people better wages. Yes, they would scream "class warfare" and "government interference" in the private sector. So?

[Doctor Hurt]

1. what are the details of the mathematical model

you are using to make this prediction?

[kentuck]

6. There is no "mathematical model" at present...

It is common sense.

[Cid_B]

57. Aside from morals, ethics and economic sense it looks like a great idea...

[roguevalley]

48. Let me know if this happens so I can run them up first. :-D

[On the Road]

2. Canceling All Credit Card Debts

would also put every bank and card issuer out of business by confiscating their assets. It would be more effective than a temporary default at preventing any lending at all in the future. Why would you lend someone money if you might be just giving it away.

Just approve Elizabeth Warren and let her take care of the abusive practices.

[kentuck]

9. "Why would you lend someone money if you might be just giving it away"

Why did the taxpayers give all those trillions to the banks??

[On the Road]

23. Nothing Was Given to the Banks

It was loaned and paid back, except for a few smaller banks who failed. Didn't cost the taxpayers anything -- it fact it made money for the tax base.

But that is missing the point. Wiping out credit card debt would be unconstitutional, so it's not going to happen. But if it did, whatever immediate relief it gave to people with credit card debt would be overwhelmed by the longer-lasting effects of removing any future lending of this kind.

[kentuck]

38. "Didn't cost the taxpayers anything"

Oh really!

They ran the economy into the ground, crashed the market, and now have paid back all the money they got from the taxpayers and everything is even?

They cannot pay us back in a lifetime.

[On the Road]

69. The Financial Excesses Cost the Economy Hundreds of Billions

No argument there. The money "given" to the banks, which is what you seemed to be referring to, was lent at interest and paid back except for a few institutions that failed.

I would have agreed with you if you said the government should have taken over the banks when they were on the edge of failing.

In any case, a loan made by credit card is an asset. Confiscating that asset is not only a taking, it's a sure way to get the whole institution to fail. That means up to $200,000 for each insured residential depositor, and wiping out every business account as well. That means the employees are not likely to get paid and those businesses are in trouble. Plus no one is likely to be able to borrow money at that point either.

It also penalizes people who have been responsible with their credit and rewards those who have overextended themselves.

However fair it might seem, it is not the right way to deal with consumer credit card debt.

[Chan790]

72. Well, that and they paid us back with our own money.

What pray tell did they do with the TARP funds...well...they carried them on the books and lent them back to the FED at overnight rates better than any interest rate you or I will ever see and used the proceeds to pay back the taxpayers with...the taxpayer's own money funneled through the FED.

Lovely rigged game my overlords in the banking game got there. The only way we could have prevented this would have been to charge more in interest than they'd get from the FED. Of course, the default rate would have been astronomical.

[Tesha]

71. Poor leadership. (NT)

[roguevalley]

50. I remember when they were going to reform credit cards and

eliminate all the bullshit practices. It failed and who led the charge? Joe Biden. I can't ever forgive him for that.

[On the Road]

70. I Don't Know the Details

but the credit card industry does need a lot more control. They have been allowed to set too many of their own rules, and need someone who's independent and looking out for the consumer.

[theophilus]

3. And, for the RWers, it could be based on biblical principles. The Jubilee.

Under the Mosaic law the Jews were supposed to forgive all debts every fifty years. All property would go back to the original owners (among the Jews), etc. There is no evidence this law was ever followed. I have wondered what would happen in this country if every fifty years all debts were cancelled. I know that unless other laws were enacted that near the cancel time you couldn't borrow anything. Oh well. We should have bailed out the mortgage holders and not the banks.

[Bluerthanblue]

5. whoops- beat me to it.

great minds.

:hi:

[theophilus]

21. It's an interesting concept that many don't know about. It jibes with the

concept that default would hurt mostly the top 1%, etc. I'm sure the wealthiest would have "suffered" the most under a Jubilee. Of course they could afford it. Just a couple less ivory backscratchers. That's why it makes sense to redistribute wealth downward from time to time. Not a "trickle" but a gusher.

[dkf]

19. Maybe that is why we have 30 year mortgages. Lol.

I guess if you refinance that is new debt?

[Bluerthanblue]

4. and to convince the religious right of this- call it the "Jubilee"-

It's biblical.

:7

[Fire1]

10. LOL!!! n/t

[hack89]

7. You want to end consumer credit forever?

because why would those banks that you don't put out of business ever lend a penny to consumers again if there is a risk that every time there is too much debt Congress will simply erase it?

[kentuck]

11. Just think of it as a fine for bringing down our economy.

Why would they lend money in the future? Because that is how they make money. Maybe they would close their doors and we could have state and community banks like Jackson envisioned?

[hack89]

59. State banks? Really?

backed by taxpayer money? Can't you imagine how hard it would be to get credit - I certainly am not willing to pay taxes so that someone else can run up huge credit card debt.

If not backed by the taxpayers, then they have to make a profit, which gets us back to where we started.

[Occulus]

40. Either you pass the law far in advance of it taking effect OR

you pass a "credit reset" law that only takes effect, in its language, "(a)s of the date and time of submission for consideration to Congress" or some such.

You either give the market time to prepare for it, or you pass it in such a way that nobody can "take advantage" of it because the effective date has already passed.

Another option would be to suspend all consumer debt payments for a year or two; legislate a general suspension of consumer credit activity except for optional payments on the debt. This would give people time to save some money and discharge some of their debt if they want to; knowing the situation is temporary will prevent the market from going absolutely haywire.

I'm only speculating here. I do think we should try to come up with something that will work, though- something that helps the people directly.

[hack89]

53. Do you also put future limits on people;s credit

so they can never put themselves in such a position again? How do you guarantee that it will not happen again in 10 years?

[NNN0LHI]

8. Let me know when they are going to do this so I can take out a cash advance first

:)

[kentuck]

12. I have heard that this has been discussed in high circles.

How serious they took it, I don't know?

[elocs]

15. Yes, I'm sure those circles are very high. They would have to be. n/t

[MilesColtrane]

22. Bazinga!

[elocs]

13. In what universe would such a proposal be "seriously" considered?

Not this one.

[kentuck]

14. Laws are laws when they are passed..

It would be up to the Congress to decide.

[muriel_volestrangler]

18. No, it would be up to the Supreme Court to decide

because it's 100% sure this would be taken there, whatever Congress says, as as 'unreasonable seizure' from the banks. And they wouldn't allow it.

[Fuddnik]

43. Attatch a rider to the bill firing them all immediately.

And hold Clarence Thomas responsible for all the bills from his ill-gotten income.

[MadHound]

16. And for those of us who have lived within our means,

Don't have credit cards or other such consumer debt, what do we get? Bupkus?

[dems_rightnow]

20. Gosh no.

Beings we're passing stupid laws, let's give all of those people a million dollars.

[hughee99]

26. You get to find a new place to keep your money,

since your bank will have gone out of business.

[kentuck]

30. Yeah, sure.

Gone out of business?

:rofl:

[hughee99]

34. The banks will lose more on this deal

then the would have in the real estate crash. You're not talking about home loans that MIGHT fail over a period of time, you're talking about everyone defaulting on their credit card all at once. Then they will shut down every credit card and never loan another dime on one.

But hell, that won't matter anyway, since this proposal is as constitutional as seizing all the assets of companies that donate to repukes and selling them off to raise the money.

[ejpoeta]

17. see, i think what would have been great is if instead of giving banks all that tarp money

because of the bad cdos.... they could have split it up and given it to every american to pay bills. Those with the subprime mortgages could use it to pay off their mortgages and then that would have taken care of the problem with the bad assets for the banks. wouldn't have had all those foreclosures either. and if you have a problem with just giving it to people, then you could say they had to pay it back with automatic pretax withdrawls from paychecks. or something. i don't know. maybe something to do with income taxes. but they give money hand over fist to rich folks without batting an eye and the rich folks don't have to do shit to get it. but try to help out regular folks and they have to jump through hoops with all kinds of stipulations. banks just backed their trucks up and shoveled tarp money in with no strings attached. and what do we get? screwed.

[kentuck]

27. You got it!

One of the few.

[dkf]

24. Screwed up your credit with indiscriminate spending?

Funny... my brother with his six figure salary and profligate spending would love this. So would Newty.

[Cant trust em]

25. Can you let me know when this is gong to happen so I can go out and buy some unnecessary shit?

I sure could use a new KenmooreSonyChevrolet thingamajig.

[kentuck]

29. Many folks did not use their credit cards for "unnecessary" shit.

They used them to get their cars fixed or water heater replaced or a roof or plumbing or necessities. Creidt cards were issued to a mass of workers instead of wage increases. It didn't matter to the workers so long as they had the money. We could make a stipulation that you could continue to pay your credit card bills as faithfully as ever, because you can afford it.

[Cant trust em]

45. Credit cards aren't issued. They are applied for and accepted.

No one forces anyone to purchase things on credit.

[lumberjack_jeff]

28. Better yet, a $500 coupon for any american-made product.

This economy will only be fixed by consumers buying things that US labor creates.

[Still Waters]

31. How about lowering all interest rates on mortgages and CC debt

Instead of having to refinance your home to lower your mortgage interest rate, why not automatically lower the rates to say 4%. For a lot of people that would be an automatic stimulus program putting extra money in their pocket every month. For credit card debt, cap the interest rate at 5 or 6 percent.

[kentuck]

32. Because we need a massive influx of spending to save this economy...

Not a nickel and dime, as Obama has been doing. We need radical changes and new ideas.

[davsand]

56. Actually, cutting credit card interest probably would help a lot of people.

In most cases, credit card debt is long term debt. If the interest rates were capped it would make a huge difference in how soon that debt gets paid off. Think of it as being the difference between borrowing from a loan shark -v- the interest you earn on a savings account...



Laura

[Cant trust em]

58. Eliminating debt so that people can spend and create more debt is not a radical idea.

It is a foolish idea.

[metalbot]

37. Would we bail out the banks again?

Because most of them would go under once the cash flow from interest payments drops.

I think if you wanted to do something related to consumer debt, you could address it by making interest payments on consumer debt tax deductible for a couple of years (perhaps with limits based on income). That would actually allow people to effectively pay down their consumer debt proportionately to their tax bracket. Obviously this leads to a big drop in tax revenues, but it injects a lot of money into the middle class.

[badtoworse]

33. This is a joke, right?

An unconstitutional taking that will destroy consumer lending. I've seen some really crazy ideas proposed here, but this is arguably the craziest.

[flamingdem]

35. So what do those who live within their means get out of this deal? nt

[Fuddnik]

44. A cookie.

If you're nice.

[flamingdem]

46. more like a shit sandwich nt

[badtoworse]

49. +1

[Lucian]

65. Oh yeah. Because all people who have CC debt are those who live outside their means.

:eyes: :eyes: :eyes:

Maybe some people lost their jobs and couldn't afford to pay off their credit card debts. Ever think about that?

[abelenkpe]

36. Jubilee makes more sense and is more humane

Than letting the elderly, poor and most vulnerable starve so even though I have no credit card debt I would certainly go for jubilee.

We should also force cram downs on mortgages to better reflect wages and forgive outrageous student loan debts.

(spelling)

[blindpig]

39. Nice idea, but...

if you think the Democratic Party is gonna cross the banks like that I want what you're smoking.

You image the Democratic Party to be what it is not, never was.

[Speck Tater]

41. Sure. We rewarded the bankers for irresponsibility.

why not reward everyone else who was irresponsible too?

And those of us who WERE responsible? Well, I guess we were just suckers for following the rules.

[Broderick]

42. +1

true

[Gormy Cuss]

47. "There are few consumers that are not burdened with credit card debt." -sorry, that's wrong.

The majority of households have no credit card debt. According to the most recent Survey of Consumer Finance (2009) 43.2% of households had credit card debt, with a median debt of $3300.

However, that doesn't mean that there aren't many people burdening with extraordinary credit card debt.

[Fuddnik]

51. Kick and Rec!

Those poor responsible banks.

Back in '95, when I got my first computer, a friend was helping me set it up. In the Win 95 set-up, it asked for a company name. My friend put in "Murder Inc".

After a while I started receiving mail for this company. And then credit card and loan solicitations. One even sent me a picture of what my corporate Mastercard would look like it. I sent it in, and I listed,

"$0" income
"$0" sales
"$0" assets.

Good credit risk, huh?

Sure enough, I got a nice shiny new "Murder Inc." emblazoned corporate Mastercard with a $18,000 credit limit at prime rate!

The first place I used it was at The Tropicana in Atlantic City.

[Dreamer Tatum]

52. Stupid idea.

Where do you think banks get money to lend to people? From investors. Where do you think investors get money to lend to banks? From people.

[dbonds]

54. The whole sham of our money system is based on people using credit.

Credit makes the imaginary numbers of the economy grow. While it would be a great idea to forgive all credit, we need to have a new system ready to implement (which I'm all for). Forgiving credit would make the imaginary numbers drop to almost zero.

[backwoodsbob]

55. no credit cards here

can I have a pony instead?

:hide: :beer:

[NutmegYankee]

60. I guess those of us with no credit debt just get screwed.

I chose to go without many luxuries like cable or a big TV to ensure I could save.

[noiretextatique]

61. i propose a "salary holiday" for republicons and the democrats who admire them

in the house, senate and in the obama administration. give up your salaries to help reduce the deficit, please.

[kentuck]

62. If the entire government can default on its debt?

Why can't we default on our credit cards??

[Zax2me]

63. Ha.

You know how many people will lose jobs, retailers, product producers - because they can't pay employees for services rendered?
This would result in a loss of jobs.

[saras]

64. Let me know before it happens so I can put my student loans on credit cards

[Lucian]

66. Either that, or forgive student loans.

[StarburstClock]

67. I've been suggesting a 5% Debt Reconciliation Act to restructure all private debt

It's a great idea that would put money back into American's pockets but our govt is corrupt and could care less at this point.

[HopeHoops]

68. Actually, just capping credit card interest rates at the nominal savings account interest rate....

...would do wonders for the economy. Does it make sense that credit card companies can charge 35% interest while savings accounts offering .05% with a $5,000 minimum balance are considered "choice"?

[TroglodyteScholar]

73. What about those of us who didn't spend more than we could afford?

What's in it for us? Or are we undeserving because we were responsible?

[RB TexLa]

74. So just throw contract law in the garbage?