The truth of the matter is that sometime in the last 50 years, there has been a significant change in the way that the economy functions. While more people are better off than before, economic risk has shifted from corporations to people. It is, I believe, a fundamental difference between the ways that conservatives and liberals think - conservatives view small government as an end in and of itself, regardless of who or what it actually impacts, while liberals are not opposed to small government, but instead feel that government, as a whole, has a responsibility to its citizens. I got into an interesting discussion yesterday with a person here at work about Social Security and privatization, but I think that the underlying schism was exactly this - I believe that the government (society) has a responsibility to try to assist those who stumble. I also believe that the average person isn't capable of planning for the long term future, especially not when the insurance and medical industries are set up the way they are here in America.
Peter Gosselin of the Los Angeles Times has written several interesting articles dealing with the shift in economic risk. Three of the articles fall in a set that they have entitled The New Deal (cleverly co-opting FDR's name for his programs) and another one was published today dealing with the new bankruptcy bill that looks like it might actually get pushed through the Senate. It's a little depressing, watching the right dismantle America.
hey, funny that you mentioned this -- i read that article on credit cards today. consumers need to be more responsible with their credit card spending, but i do believe there should be some form of capping to the interest rates these credit card companies are charging. their policies unconscionable where consumers a lot of times have actually paid off the original principle of their debts only to find interest rates and other fees have jacked it up. courts have struck down similar contracts in the past. the credit card companies need more disclosure. i don't know what the new bankruptcy bill says, but generally a debt obligation shouldn't be discharged b/c of bankruptcy. you still owe it.
I agree that consumers need to be more responsible with their spending, but I'm not sure that the majority of people are really capable of doing it by themselves. As much as I hate to say it, I believe that the majority of people are just kind of stupid. Calculating compound interest, while not difficult math, takes more effort than most people are willing to exert. In the article cited, they show a real-life example of a lady who paid the minimum every month on her credit card bill, but watched the interest and fees balloon the debt even higher. The minimum payment should be calculated by the companies to prevent such an occurrence from happening. And interest rates should not be allowed to go as high as 30%.
The new bankruptcy bill is essentially going to reduce the number of people who can qualify for bankruptcy filings, without taking into account the fact that most of the large increase in filings over the past 15 years has been due to middle-class families who have a major medical expense. Insurance can often cover part of the medical expense, but serious illnesses often require extended convalescence times away from work, which means a further reduction in income, especially now that two-income families are almost a given. Yes, this bill will prevent a small number of people from abusing creditors, but it punishes a growing number of people who through no fault of their own are thrown rapidly into debt.