Tag: Consumer Debt

The Return of Debtor Prisons

  When the Wall Street bankers ran up hundreds of billions of debt they could not pay back they convinced the American taxpayers (via the government) to bail them out, no questions asked.

  However, when the American taxpayer runs up a little debt, not only is there no bailout, there is no mercy either.

 It’s not a crime to owe money, and debtors’ prisons were abolished in the United States in the 19th century. But people are routinely being thrown in jail for failing to pay debts….

   “The law enforcement system has unwittingly become a tool of the debt collectors,” said Michael Kinkley, an attorney in Spokane, Wash., who has represented arrested debtors. “The debt collectors are abusing the system and intimidating people, and law enforcement is going along with it.”

 Frequently the bail is set at the exact same amount as the debt owed. While this makes it easy for judges, it is also a tacit admission that these are de facto debtor prisons.

 Many state constitutions bar imprisonment for debts, yet in many cases the judges in these states don’t seem to care. Some seem eager to side with the powerful against the weak.

Wall Street still overestimating the American consumer

  Despite every effort from Washington, the American consumer continues to repair his/her balance sheet. The federal government has repeatedly gone back to what it knows and teased us with goodies (like cash4klunkers) in an effort to get us to spend money we don’t have on things we don’t need, but those days appear to be over.

 (Bloomberg) — U.S. consumer credit fell in September for an eighth straight month, the longest series of declines on record, as thousands of Americans lost their jobs and banks tightened access to loans.

   Borrowing fell more than economists predicted, declining by $14.8 billion, or 7.2 percent at an annual rate, to $2.46 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $9.86 billion in August, less than previously estimated. The consecutive declines were the most since records began in 1943.

 The optimists, who are already predicting that happy days are here again, fail to mention how the economy will rebound without the American consumer. Consumer spending is 70% of the economy. So how will the economy grow when the consumer is paying down debt rather than buying junk at the mall?

Economic things I learned or overheard this Memorial Day

(The following was cross posted from Economic Populist and Venomopolis.)

I’m a sucker for barbecues, especially good ones.  Normally I’m not a “family” person, but I am a people person.  When it comes to barbecues, though I tend to even go to the ones my family puts out.  This year I hosted, unfortunately the weather was not on my side and being someone into risk management I decided to hold an “indoor bbq.”  The food, as always, was good, but my other type of appetite was also satisfied, my hunger for news and tid bits

The Next Financial Mess!!

Dealing in Debt!!

Everyone, almost, is in a complete Rage at what is happening, and has been allowed to happen by not only soft regulation but the ease on any regulation in the Banking Industry, Morgage Industry, Wall Street, and in a Rage you should be.

But want a better picture of the who got us here any why, leave your computer and go to the nearest mirror and take a Good Hard Long Look at the reflection coming back, Yep Folks, it’s most of you, and the rest of the shit hasn’t yet hit the fan, but it’s quickly coming!

Remember the clowns you hire to represent you in Washington, and local and state, are your clowns, you pay them.