Post by RPankn on Mar 10, 2005 2:53:27 GMT -5
[Bold in the original]
I Need to Tell You Something About Credit Cards and Personal Responsibility
by bink
Wed Mar 9th, 2005 at 09:21:19 PST
A point keeps being made in diary comments by people who "have no sympathy" for other people who "overspend on credit cards" and then "can't pay off their debts."
Apparently, these people have no "sense of personal responsibility" and should "held accountable" for their habits.
This all sounds very logical and reasonable, doesn't it? We're all for personal responsibility, aren't we?
Well ... Well?
I want to tell you something about credit cards and "personal responsibility."
Citizens of democratic countries do not have a limitless responsibility to pay off debts that they incur, whatever the reason. I know that this may come as a surprise to folks who have a strong belief in a culture of personal responsibility, but this is a fact.
I repeat: in a democracy, citizens do not have limitless responsibility to pay off debts that they incur. In a democracy, economics of all types -- whether they be household or national -- are subjected to limits created by the people that ensure that THE ECONOMY WORKS TO SERVE THE PEOPLE and PEOPLE DO NOT WORK TO SERVE THE ECONOMY.
In order for our lending system to work, citizens do have the responsibility to pay off their debts to the degree that they are able to do so without otherwise injuring themselves or the system. If there were no enforcement on the repayment of debt, no one would be willing to lend money. And without a lending system, supporting a commerce system would be difficult, etc., etc., etc.
However, when lenders offer you that credit card, they are assuming a risk. This risk is that you will not be able to pay off the loan. In order to insure against this risk, they charge you interest. This interest is meant to lessen any harm that they might incur, should you not be able to repay the full amount of the loan.
And so, everything works out. You get a loan. The credit card gets monthly payments against the loan -- plus a supplemental amount that covers them in the case that you cannot make full repayment. Because the current bankruptcy laws adequately protect the credit card companies, they are able to make a profit -- in fact, huge profits -- off of the arrangement.
The reason that I mentioned "democracy" above is that I want to enforce the idea that credit card companies operate at the pleasure and the discretion of the people. The reason that they are able to enter into the business that they are in is that the people have explicitly authorized them to do so. The people have decided that the business of offering short term loans via the "credit card payment system" is a valuable service. These businesses must be licensed and chartered by the state. [This is an excellent and important point that too many people forget, or are ignorant of. Corporations are entities -- legal fictions -- created by governments; who themselves, of course, derive their authority from the people they represent. Therefore, corporations cannot exist without the consent of the people. If people living several hundred years ago -- when the concept of the corporation was a relatively new idea -- were around today, they would probably be surprised and shocked at what corporations have evolved into today. Back then, corporations were not considered "persons" with legal rights like natural persons. And corporations were not eternal either: their lifespan was limited to a certain purpose spelled out in its charter, after which it was dissolved.
Under the new bankruptcy law, credit card companies will become a liability to the public good, rather than an asset. This, I think, is demonstrably true when you examine any of the scenarios that have been put out by reputable economists and by academics who specialize in analyzing consumer debt and its effects on the public.
By making it very difficult to secure a bankruptcy, credit card companies and other lenders are trying to obtain a guaranteed income stream from society by means of legislation. This has nothing to do with "free markets" or "personal responsibility." This is a simple matter of rigging the game in such a way that your personal productivity is tithed to entities who are rich and powerful enough to purchase this right from government.
I feel like I am just rambling on at this point ...
To my mind, "personal responsibility" is a very good concept. But there must be a limit here. This limit can be very clearly delineated by examining at what point the concept of "personal responsibility" becomes a liability to society as a whole.
With this bankruptcy bill, the credit card companies are going way over the line. They are establishing themselves as, essentially, wealth-sucking leeches that are not operating under intent of the laws by which they are licensed to do business in this country.
Banks and credit card companies exist to provide a service to us. Not the other way around.
I'm not sure how much more clearly I can say this.
www.dailykos.com/story/2005/3/9/122119/5895
I Need to Tell You Something About Credit Cards and Personal Responsibility
by bink
Wed Mar 9th, 2005 at 09:21:19 PST
A point keeps being made in diary comments by people who "have no sympathy" for other people who "overspend on credit cards" and then "can't pay off their debts."
Apparently, these people have no "sense of personal responsibility" and should "held accountable" for their habits.
This all sounds very logical and reasonable, doesn't it? We're all for personal responsibility, aren't we?
Well ... Well?
I want to tell you something about credit cards and "personal responsibility."
Citizens of democratic countries do not have a limitless responsibility to pay off debts that they incur, whatever the reason. I know that this may come as a surprise to folks who have a strong belief in a culture of personal responsibility, but this is a fact.
I repeat: in a democracy, citizens do not have limitless responsibility to pay off debts that they incur. In a democracy, economics of all types -- whether they be household or national -- are subjected to limits created by the people that ensure that THE ECONOMY WORKS TO SERVE THE PEOPLE and PEOPLE DO NOT WORK TO SERVE THE ECONOMY.
In order for our lending system to work, citizens do have the responsibility to pay off their debts to the degree that they are able to do so without otherwise injuring themselves or the system. If there were no enforcement on the repayment of debt, no one would be willing to lend money. And without a lending system, supporting a commerce system would be difficult, etc., etc., etc.
However, when lenders offer you that credit card, they are assuming a risk. This risk is that you will not be able to pay off the loan. In order to insure against this risk, they charge you interest. This interest is meant to lessen any harm that they might incur, should you not be able to repay the full amount of the loan.
And so, everything works out. You get a loan. The credit card gets monthly payments against the loan -- plus a supplemental amount that covers them in the case that you cannot make full repayment. Because the current bankruptcy laws adequately protect the credit card companies, they are able to make a profit -- in fact, huge profits -- off of the arrangement.
The reason that I mentioned "democracy" above is that I want to enforce the idea that credit card companies operate at the pleasure and the discretion of the people. The reason that they are able to enter into the business that they are in is that the people have explicitly authorized them to do so. The people have decided that the business of offering short term loans via the "credit card payment system" is a valuable service. These businesses must be licensed and chartered by the state. [This is an excellent and important point that too many people forget, or are ignorant of. Corporations are entities -- legal fictions -- created by governments; who themselves, of course, derive their authority from the people they represent. Therefore, corporations cannot exist without the consent of the people. If people living several hundred years ago -- when the concept of the corporation was a relatively new idea -- were around today, they would probably be surprised and shocked at what corporations have evolved into today. Back then, corporations were not considered "persons" with legal rights like natural persons. And corporations were not eternal either: their lifespan was limited to a certain purpose spelled out in its charter, after which it was dissolved.
Under the new bankruptcy law, credit card companies will become a liability to the public good, rather than an asset. This, I think, is demonstrably true when you examine any of the scenarios that have been put out by reputable economists and by academics who specialize in analyzing consumer debt and its effects on the public.
By making it very difficult to secure a bankruptcy, credit card companies and other lenders are trying to obtain a guaranteed income stream from society by means of legislation. This has nothing to do with "free markets" or "personal responsibility." This is a simple matter of rigging the game in such a way that your personal productivity is tithed to entities who are rich and powerful enough to purchase this right from government.
I feel like I am just rambling on at this point ...
To my mind, "personal responsibility" is a very good concept. But there must be a limit here. This limit can be very clearly delineated by examining at what point the concept of "personal responsibility" becomes a liability to society as a whole.
With this bankruptcy bill, the credit card companies are going way over the line. They are establishing themselves as, essentially, wealth-sucking leeches that are not operating under intent of the laws by which they are licensed to do business in this country.
Banks and credit card companies exist to provide a service to us. Not the other way around.
I'm not sure how much more clearly I can say this.
www.dailykos.com/story/2005/3/9/122119/5895