Tonight I’m reading here that pending ‘credit-card legislation’ is poised to reach the Obamanation’s desk soon. The bill would ostensibly “sharply curtail credit card issuers’ ability to raise interest rates and charge fees.” Other details of the bill released point to the fact that it will enact prohibitions of raises in interest rates on card-holder unless 60 days delinquent, and “on cards with more than one interest rate, issuers will have to apply payments first to the debts with the highest rates, which would help borrowers pay off their cards more quickly.” This, also ostensibly enforced by the Feds.
Cause and effect from Congress and the Obamanation manipulating credit markets? Moral hazard?
From the above article, “Card executives said the changes will force them to charge higher rates and annual fees to delinquent customers and those in good standing.”
And therein lies the dirty little detail here folks, the dirty little detail of all socialistic government intrusion. Those in good standing will foot the bill for this. In layman’s terms folks – just as in bailing out homeowners, corporations, bankers, et al. that made irresponsible decisions, the 
Omnipotent Federal government is swooping in like an unstoppable giant vulture and ‘saving the day.’ The citizen that pays taxes and manages credit wisely, working 9-5, honestly staying within his means – he gets the shaft.
Omnipotent Federal government is swooping in like an unstoppable giant vulture and ‘saving the day.’ The citizen that pays taxes and manages credit wisely, working 9-5, honestly staying within his means – he gets the shaft.
5 comments:
Tim, you’ve got a little gift waiting for you over at Libertarian Republican blog this morning…
Beware of those dirty hippies liberals . They’re immature and irresponsible. …All they want is free sex and legalized drugs and mandatory abortions.
Well come to think of it mandatory abortions for liberals may be a good thing!.
Eric – I appreciate the linkage, keep up the good work, I’ll do what I can to send my flock over to you as well
IAGNB – I have pondered the same thing, I am against abortion, but if they are killing off future generations of looters? Hmm….
You’re right about the effects of socialism, government interference in private markets, and moral hazards, of course, but I’m not sure that the credit card bill is that bad. From what I’ve read, most of the provisions are actually pretty reasonable: preventing abuse, shady tactics, and other ways the CC companies try to dick people around. Most of the whining is coming from the CC companies themselves, and it sounds [to me] more like posturing than actual predicted effects.
Keep in mind, CC companies make money off the “bad” customers (people who pay off their balance every month) too. The fees that they charge to merchants more than compensate for the costs involved, even with rewards programs and such. Unless they outlaw the “equal-charge” part of the current CC merchant agreements, and a substantial number of merchants start charging more to use a CC (to offset the fees), people like me will still use a CC to pay for everything, which will still put [a small amount of] money in the CC company’s pocket. Somebody will be willing to take that money under terms similar to the current ones, as long as capitalist competition still exists in the country (which may be coming to an end, but that’s a much more serious disaster and different topic).
I just don’t see this bill as that bad, from what I’ve read so far… just my opinion.
Nick – I can see your point here, just watching Cspan and the Repubs in the House voted for it by a wide margin. Perhaps there are some good points in the legislation. I just come to the issue from a basic sense of serious skepticism as to the bill helping those that it purports to. I agree that the CC companies do use shady tactics but I have the right as a consumer to not sign a CC contract, as do other consumers. I come to this from more of the angle of not messing with the market, even with it’s shadyness, as I suspect that government intrusion will decrease credit to all consumers and actually cause the exact opposite of the proposed intention. This simple fact is true of nearly every government manipulation and any market. I like the way that things are – I ‘charge’ everything that I possibly can and earn cash rewards, essentially free money. I can do this because I have an 800 credit score and own a business as well. I don’t like the fact that lawmaker’s effort will possibly hinder me in using my cards for rewards….I do however respect your opinion!
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