Credit card companies continue to bombard us with invitations to use their products, yet guess who was the impetus behind the most recent changes in US bankruptcy laws, which, by the way, make it much more difficult for those who need it most to declare bankruptcy?
It's been a while since I studied how banks make money, but I remember enough to know that if you say "out of thin air" you'd be close enough. Bankers and credit card company tycoons are some of the richest people in the world. Yet when it comes to bankruptcy law, guess who was behind making it much harder for the average Joe Blow to declare bankruptcy?
I've opined before that people get into bankruptcy because they buy too big of houses. It turns out that that's not nearly as big a factor as I thought.
Since at least 1997, bankers and credit card moguls have been pressing for a squeeze on the little guy, and in 2005 they were successful.
The 500-page legislation won final congressional approval last week after being pushed for eight years by banks and credit card companies...
It's common anymore for lobbyists to write the legislation they are advocating, and I wouldn't be surprised in the least if such a thing happened in this case. Meanwhile, it becomes harder and harder for the little guy to get by.
What's the greatest cause of bankruptcy? Inability to pay health care costs. Incidentally, two of the largest lobbies in the US Congress represent the pharmaceutical companies, who want to keep the way open to make money hand over fist, and the trial lawyers, who want to make sure that large legal settlements related to health care will still be de rigueur. No wonder health care is cheaper in socialist Canada. The corruption of Socialism works at least as good as corrupt capitalism. It appears that in this instance, it's working better. I don't advocate a single-payer socialist system like Canada has. What I recommend is cleaning the cockroaches out of America's cupboards.
By the way, the lawyers probably don't like Texas much anymore, which moved to limit malpractice settlements in court, the result of which is a mass migration of doctors to Texas. I hope Utah follows Texas' example.
In an interview with DemocracyNow.org, David Swanson of DebtSlavery.org noted the following:
The truth of the matter is that bankruptcies are up, because debt is up, dramatically. And in fact, in relation to debt, bankruptcy filings are down. And debt is up in large part because of the neglected health care crisis. A well-done academic study found that about half of bankruptcy filings are the result of medical costs. Another 40% are due to job loss, divorce, or a death in the family. Most of the others are due to natural disaster or call up to fight in Iraq or identity theft or victim of a crime.The money changers claim that the legislation was for a different reason.
The financial services industry argued that bankruptcy frequently is the last refuge of gamblers, impulsive shoppers, divorced or separated fathers avoiding child support, and multimillionaires who buy mansions in states with liberal homestead exemptions to shelter assets from creditors.
“In recent years too many people have abused the bankruptcy laws,” Bush said. “They walked away from debts even when they had the ability to repay them.”
That doesn't appear, however, to be really true. Over 95% of people who declare bankruptcy don't do so for any of the reasons the money changers claim.
It's interesting that when some people grow rich, all they want to do is get richer. The money lenders did not need this legislation; their pockets are already sufficiently lined.
What is really needed is to fix the problems that cause so many people to go into debt, such as making health care affordable. It's time for Congress to kick the pharmaceutical and trial lawyer lobbyists out of their office and tell them to never come back. For those like Orrin Hatch, who have been re-elected in large part due to the deep pockets of these lobbyists, it's time for an elective replacement.