Wednesday, March 09, 2005



It appears Bush will get his new bankruptcy law, which the credit card and financial industry has wanted for a long time.

Bush and his rich finance industry friends claim that it’s too easy for Americans to walk away from their debts, but let’s look at the root of the debt problem.

First, the whole American socioeconomic system is structured to encourage lots of debt. Americans are exhorted to buy and consume with abandon, and credit companies practically shove credit cards down your throat. The combination of easy credit, the constant high-pressure exhortation to consume, and high interest rates (averaging about 18.9%) is bound to put many Americans in precarious financial straits, and indeed, the average American has $8,562 of credit card debt.

Second, the poor economic situation has created great financial insecurity for many Americans, and under Bush it’s just getting worse. Add to that declining health insurance coverage and other problems. Mix in the exhortation to increase personal debt for heavy consumption, and you’ve got a recipe for disaster — or a sweet deal, depending on your point of view.

What’s happened is that elites have forced many Americans into a situation where they are saddled with heavy debts, have low income, enjoy little job security, have no health insurance, and hardly any savings. Even Social Security is in danger. And now the elites are going to deny the “little people” one exit they have from this financial hell. We are seeing the creation of what Warren Buffett calls the “sharecropper society” and what Paul Krugman calls the “debt-peonage society.” In other words, it’s the next step in the elite program to make America into a new feudal society with a super-rich aristocracy and a vast population of serfs.

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