Here's a thought for the credit crisis in the USA

[veronica_rich]

I wonder how much it would cost the federal government to bail out the bad personal debt of its citizens, rather than these big companies? I guarantee forgiving credit card debt alone wouldn't cost any less, AND it would probably get the economy moving much faster again to boot. People would have freed-up income they could go to the store and spend, instead of having to send $500 payments to each credit card every month in an endless cycle of pay/charge because they don't make quite enough to pay AND shop.

Comments

[mamazano.livejournal.com]

I don't have any credit cards. After getting screwed royally with them, and going through a divorce where all the debt was in MY name, I decided it was safer NOT to have them.

Thank goodness. Most of my friends are up to their ears in debt, constantly putting gas and groceries on their major credit cards, never paying more than interest, and not having enough credit to actually purchase the items credit cards were invented for - emergency car repairs, etc.

I agree, if they were to just wipe out ONE card per household, they could give the economy the boost it needs.

[veronica-rich.livejournal.com]

Hey, I'd take only one card wiped out. I could pay the other two easily enough if they abolished the big one. Besides, my personal debt is a tiny, teeny fraction of $700 billion or $250 billion either one.

[metalkatt.livejournal.com]

If we don't have over a certain limit of credit to bail out, do we get the remainder of the allowance to put toward gas and food and tuition and stuff?

[veronica-rich.livejournal.com]

Sorry, mate - credit come, credit served. :-P

No, I'm serious. If you have a steady income flow and you're paying on old credit debt, that's new money you are NOT regularly giving to the grocery store (opting instead for the cheaper food brands) or Target or Best Buy or any of these places that support so many jobs.

[metalkatt.livejournal.com]

No, I understand, really. It would be a breath of relief to know that those back-bills would be forgiven so a person can concentrate on moving on, not shoving money in a bottomless pit.


(BTW, I'll be on in about an hour and a half. Let me know if you want to movie, and if so, what one. The downstairs VCR doesn't work, so we'll have to do DVD.)

[gryphons-lair.livejournal.com]

The Republicans who are throwing fits over bailing out the banks with gov't money would howl even louder over that idea. They'd claim (not completely unreasonably) that it rewards the people who took on debt they knew (or should have known) they couldn't pay and punishes the people who lived within their means or got into debt but then fought out of it the hard way.

If it was possible (I don't think it is) a $10,0000 "refund" that could be applied only to current debt, be that credit cards, student loans, mortgages, whatever, would be a good idea for the same reason you outline above. I'd get to pay down my mortgage, my neighbor could pay off/down their car loan, the new college graduate could pay off some student loans, other people could reduce their credit card debt, and the person whose doctor has stopped treating them until they pay something on their bill could do that and start getting medical care again.

The percentage of people without ridiculously high incomes who carry no debt at all is so small this would be close enough to "universal" as not to matter, practically speaking.

Not that the idea of the Fed paying off my mortgage isn't tempting, mind.... *G*

[finding-neo.livejournal.com]

How about if we just eliminate credit altogether? That means you have to save money to buy everything you need.

Think about it - if companies couldn't borrow money they wouldn't have debt so they could pay their employees more, so people COULD afford to save money for the big things like cars and houses.

But oh, gee, then all the banks would go under because that's how they EARN money - off other people's money....then we wouldn't have a place to put our money....but then banks wouldn't be needed anyway, because we don't need to borrow the same money we loan the banks....

A lot of people don't understand that when you open any type of bank account you are actually allowing the banks to USE your money to make money!

Seems like a monetary paradox to me.

[veronica-rich.livejournal.com]

Until, of course, you lose your job and have no income for a period of time, and then you use up whatever savings you managed to amass, and still don't have a job, and then how do you eat?

(Saying anyone can get a job if they're willing to work for little enough isn't always accurate. I applied for all kinds of "menial" jobs when I was out of work and was told I was overqualified and would just leave when something better came along.)

[mamazano.livejournal.com]

I ran across that as well, when my youngest daughter was having surgeries. No job, no health insurance, no food to feed the other kids.

Most applications were rejected because I was overqualified, the ones in my field were being given to people with PhD.'s (I have a B.S.).

Went to the Food Stamp office and was told, I kid you not, "a college educated white woman don't need no food stamps". I was directed to Catholic Charities for a bag of food.

No, the problem in this country is not so much credit debt as low wages, and lack of jobs. Seasonal employment is the name of the game here is Florida and in the off season everybody suffers.

But you are right, most people I know these days are living on their credit cards, using them for food and gas.

[a-silver-rose.livejournal.com]

Agreed on the "menial" jobs remark, as I applied for them myself. Never even got interviewed for those, for some reason. And I'll thank credit for the fact that I can still chew my food. Due to my inability to afford health insurance, I had to go more into debt in order to get some major work done on my teeth (two root canals, two crowns, 1 tooth extraction, and a scaling so far, and still not done yet).

[metalkatt.livejournal.com]

It would definitely widen the gap between the peasants and the aristocrats, as those with no family money could never attend advanced schooling, thus ensuring that their noses are kept in the dirt.

[justawench.livejournal.com]

More important than paying out $X,XXX is getting some freaking regulation back in place to prevent this from happening. They've been weakening the laws put in place after the Great Depression in the 1970s and you can see where that's gotten us.

"Wah! My depository customers want to invest and I don't want to lose their business!" You know what banks? You don't get unlimited profits and growth. Not yours.