Did you know that total U.S. credit card debt is about $850 billion? That amounts to about $5,000 of debt for every credit card in the country.
It’s obviously a huge number. And yet it is a much smaller number than the amount the U.S. government doled out in three quantitative easing programs to prop up the economy. What if, instead of giving stimulus money to banks and big businesses, Congress and the president had instead just paid off everyone’s credit card debt?
Obviously such a plan would have been unfair to all those thrifty people who have little or no credit card debt. But it also wasn’t fair that the government bailed out banks that made stupid loans and that the executives making the decisions about those loans sometimes got nauseatingly large bonuses. It isn’t fair that middle class Americans often pay far more in taxes than wealthy folks who can take advantage of legal loopholes.
In terms of simply jump starting the economy, imagine the impact to ordinary people who would no longer have enormous revolving debts at 29% interest. Paying off credit card debts would free up hundreds of billions of dollars that people could be spending on an ongoing basis.
Did you know that consumer spending accounts for two-thirds of U.S. GDP? Yet when it came time to try to boost the economy, the government focused on the other third–three separate times.
Earlier this week Federal Reserve Chairman Ben Bernanke held a news conference and told everyone that the economy is well on its way to full recovery. He said that inflation remains under control and that rising gas prices really won’t have a significant impact.
I’ve got corrals in my back yard and I can recognize crap in virtually any form. I’m tired of government leaders who try to feed it to us while telling us how much we enjoy it and how good it is for us.
Realistically, I know the government is not going to wipe out existing credit card debt. But wouldn’t it be great if the next stimulus program benefited ordinary people instead of those who are already cashing big bonus checks?
Imagine the clout a politician would have at election time if he could claim responsibility for erasing the bulk of consumer debt.