Monday, October 17, 2005

Plastic Safety Net

A couple of recent posts by fellow bloggers: Neil's Bush/GOP Ownership Society and Dave's The War on Labor, elicited some comments on how those no-goods at the bottom of our societal heap deserve their financial woes because of irresponsible lifestyles and financial management. The comment threads seem to have run their course, but I'm sure the attitudes of the commenters haven't changed. So, I'd like to publish here, in its entirety, a post from the blog Facing South at the Institute for Southern Studies (The Voice of the Progressive South). The post is titled The Bankruptcy Bill and the Plastic Safety Net, and is based on a study done by the Center for Responsible Lending and Demos. The gist of the study's results is this:

The new bankruptcy bill was passed, in part, based on a stereotype that credit card debt results from extravagant and irresponsible use. The Demos/CRL survey contradicts that widespread belief, showing that lower-income families, by and large, are using credit cards judiciously and trying to pay them down responsibly.
All those scoundrels out there charging the plasma TVs, sound systems for their cars, bling bling for their girlfriends, etc etc, are just more myths the folks a rung or two up from the basement (to use Neil's analogy) as well as those living up in the penthouse, tell themselves in order to have a peg upon which to hang their own superiority. The truth is that most of us are one serious surgery or illness, one job loss, one bad car accident, away from needing that plastic safety net to help us make it through the night. So, with no further ado.........survey shows:

The Bankruptcy Bill and the Plastic Safety Net

With just five days until the Bankruptcy Bill goes into effect -- the measure Congress passed last spring with the votes of 18 Democratic Senators and 73 House Dems -- comes a disturbing new report from the Center for Responsible Lending and Demos about debt in America.

Drawing on vast reams of data from the national survey of household debt, the report finds that debt and bankruptcies are skyrocketing not because of frivolous spending, but because job instability and medical expenses are forcing families to use credit cards as a safety net.

The new bankruptcy bill was passed, in part, based on a stereotype that credit card debt results from extravagant and irresponsible use. The Demos/CRL survey contradicts that widespread belief, showing that lower-income families, by and large, are using credit cards judiciously and trying to pay them down responsibly.

Among the findings in the survey:

* Seven out of 10 low- and middle-income households reported using their credit cards as a safety net — relying on credit to pay for car repairs, basic living expenses, medical expenses or house repairs.

* Households that reported a recent job loss or unemployment, and those without health insurance, were almost twice as likely to use credit cards for basic living expenses.

* $8,650 is the average credit card debt of a low- and middle-income indebted household in America.

The report also notes that, at the same time families are being forced into using plastic to pay the bills, credit card companies are making it harder to escape debt, including changing "the interest rate and other terms of credit any time and for any reason."

But instead of helping millions of families, Congress decided to Leave No Banker Behind

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