Tag: debt

Debtors’ Prison Still A Reality?

July 19, 2010 | By | 4 Replies More
Debtors’ Prison Still A Reality?

According to a recent article by Chris Serres at the Minnesota Star Tribune, courts still order debtors to go to jail when they can’t afford to pay a judgment.

Not only are the national media largely unaware of this phenomenon, but The New Yorker published an article last April that characterizes debtors’ prisons as a pre-20th Century institution, and describes the America as a refuge for debtors.

As many as two out of every three Europeans who came to the American colonies were debtors on arrival. Some colonies were, basically, debtors’ asylums. By the seventeen-sixties, sympathy for debtors had attached itself to the patriot cause.

Jill Lepore of The New Yorker goes on to describe how American treatment of debt has evolved to allow bankruptcy and why this is a good thing.

Debtors’ prison was abolished, and bankruptcy law was liberalized, because Americans came to see that most people who fall into debt are victims of the business cycle, and not of fate or divine retribution.

Even Wikipedia describes debtors’ prisons as a thing of the past, or at least an unconstitutional one, according to this 2009 New York Times editorial, “The New Debtors’ Prisons.”

20th Century Debtors’ Prison

Times have changed. To be sure, most Americans who are deep in credit card debt do not have bench warrants issued for their arrest. However, in Illinois, Indiana and other states, a person who’s gotten a judgment entered against them can miss a court date and find themselves being hounded by the police.

What about the argument that defendants may owe the money they are being sued for, and should have gone to court? Perhaps the threat of jail is the only way to make them appear in court.

Reporters from The New York Times and The Federal Trade Commission have found that the collection industry is in dire need of repair, and cited numerous, ubiquitous problems. Some of these problems are startling. To wit:

[More . . . ]

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This should be illegal

April 26, 2010 | By | Reply More
This should be illegal

Can you believe this? The United States government is soliciting donations from citizens “to help reduce the public debt.” This is utterly shameful for a government that is merrily spending far more than it takes in, without remorse.

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U.S. House approves funding to maintain the empire

December 16, 2009 | By | 3 Replies More
U.S. House approves funding to maintain the empire

As distinct from other peoples, most Americans do not recognize — or do not want to recognize — that the United States dominates the world through its military power. Due to government secrecy, our citizens are often ignorant of the fact that our garrisons encircle the planet. This vast network of American bases on every continent except Antarctica actually constitutes a new form of empire — an empire of bases with its own geography not likely to be taught in any high school geography class. Without grasping the dimensions of this globe-girdling Baseworld, one can’t begin to understand the size and nature of our imperial aspirations or the degree to which a new kind of militarism is undermining our constitutional order. —Chalmers Johnson

It is with the context provided by that quotation from historian Chalmers Johnson that one must understand today’s news that the House of Representatives has approved funding today for defense maintaining the empire. The level of spending has been approved at $636.3 billion dollars– nearly two-thirds of a trillion dollars(see related post on how much a trillion really is) to maintain our network of more than 800 military facilities in more than 140 countries around the world. That spending includes $128.3 billion for fighting our current wars, although Afghanistan is expected to require an additional $30 billion to fund the most recent troop increase.

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What Americans owe on their credit cards

June 9, 2009 | By | 1 Reply More
What Americans owe on their credit cards

What do Americans owe on their credit cards? A huge aggregate amount that constitutes a ticking time bomb that could further devastate the economy. Here are the details, from Consumeraffairs.com:

Average bankcard borrower debt, defined as the aggregate balance on all bank-issued credit cards for an individual bankcard borrower, inched upward nationally 0.82 percent to $5,776 from the previous quarter’s $5,729, and 4.09 percent compared to the first quarter of 2008. The highest state average bankcard debt remains in Alaska at $7,476, followed by Tennessee at $6,869 and Nevada at $6,677.

This is per individual bankcard borrower. For the average debt of a married couple, then, double the average amount.

The same site reports that the number of consumers who are three or more months behind on their credit card payments is up 11 percent over the same period from 2008.

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China is canceling America’s credit card

May 1, 2009 | By | Reply More
China is canceling America’s credit card

According to Raw Story:

China, wary of the troubled US economy, has already “canceled America’s credit card” by cutting down purchases of debt, a US congressman said Thursday.

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American productivity versus wages over the decades

February 25, 2009 | By | Reply More
American productivity versus wages over the decades

Richard Wolff has been a professor of economics at the University of Massachusetts since 1981. Media Education Foundation has just released a new video of Wolff, offering his opinions on the current economic crisis. Here’s the trailer, which offers some dramatic motion-graphs illustrating wage stagnation versus productivity in America. Here’s the blurb from MEF:

Professor Richard Wolff breaks down the root causes of today’s economic crisis, showing how it was decades in the making and in fact reflects seismic failures within the structures of American-style capitalism itself. Wolff traces the source of the economic crisis to the 1970s, when wages began to stagnate and American workers were forced into a dysfunctional spiral of borrowing and debt that ultimately exploded in the mortgage meltdown. By placing the crisis within this larger historical and systemic frame, Wolff argues convincingly that the proposed government bailouts, stimulus packages, and calls for increased market regulation will not be enough to address the real causes of the crisis, in the end suggesting that far more fundamental change will be necessary to avoid future catastrophes.

I haven’t viewed the entire video, only the trailer, but even the trailer presents important context for our current economic crisis.

I do hope that, in the full video, Wolff puts blame not only on the profit-makers but also on American consumers, who have clearly made quite a few terrible decisions in their attempts to live beyond their means. Not all of that accrued individual debt was for the purpose of buying essentials such as food, housing and health care. There is a LOT of blame to go around: my targets include the greedy and corrupt financial sector and many irresponsible consumers. Not that all businesses are greedy, nor all consumers irresponsible.

With this caveat, though, I did want to link to this video trailer because the graphs are mind-blowing. Further, MEF has put out terrific videos that offer clarity regarding many of our country’s most contentious issues. One example is the MEF production, War Made Easy.

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The real problem with the economy

February 8, 2009 | By | 1 Reply More
The real problem with the economy

I’m not an economist, yet I know that the most vocal economists these days are not shooting straight with us. You can see it in their faces and you can hear it in their voices.

Niall Ferguson is a professor of history and a professor at the business school at Harvard. His analysis of our economic problems rings true to me. He starts with the premise that we are in hock up to our eyeballs and we are in massive denial that this is the real problem:

The harsh reality that is being repressed is this: the Western world is suffering a crisis of excessive indebtedness. Many governments are too highly leveraged, as are many corporations. More importantly, households are groaning under unprecedented debt burdens. Average household sector debt has reached 141 per cent of disposable income in the United States and 177 per cent in the United Kingdom. Worst of all are the banks. Some of the best-known names in American and European finance have balance sheets forty, sixty or even a hundred times the size of their capital. Average U.S. investment bank leverage was above 25 to 1 at the end of 2008. Eurozone bank leverage was more than 30 to 1. British bank balance sheets are equal to a staggering 440 per cent of gross domestic product

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States don’t have to wait for stimulus payments

February 2, 2009 | By | Reply More
States don’t have to wait for stimulus payments

What with the Congress mulling over plans for stimulating the American economy, there is an even more critical role to be played by the states in delivering aid to those hardest hit by our current economic crisis. States are where the tires hit the road, and states can act much more efficiently and quickly to meet the specific demands of their citizens. Even after the states have taken action, Congress can support these actions with direct funding and augment the strained budgets the states face with declining tax revenues in our recessionary economy.

I’ll use an example from Missouri. We have just elected a Democratic Governor after four years of a GOP Governor who spent his time giving tax breaks and favors to corporations and contributors and left the State of Missouri with a budget shortfall of over $300 million. We have a GOP lead legislature in both chambers of our bicameral legislature. So far, everyone has promised “bi-partisanship” and all are looking at ways to make up the differences in funding because Missouri, like all states, has to have a balanced budget.

Regardless of responsibility for why revenues are down, the Governor apparently will have to cut the budget in the current fiscal year to make ends meet. I say apparently because of that pesky requirement we balance or budget each and every year. So how does a state government fully fund priorities when immediate cash revenues keep that from being done? Here’s how . . .

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Toward ever-greater debt and dependency

November 2, 2008 | By | 2 Replies More
Toward ever-greater debt and dependency

Bill Moyers sat down with history and international relations expert and former US Army Colonel Andrew J. Bacevich, who has authored a book entitled:  “The Limits of Power: The End of American Exceptionalism.” Bacevich has identified three major problems facing our democracy: the crises of economy, government and militarism.  These three problems all have something […]

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