March 26, 2009
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News: State of the Union; Credit Card Union, that is.
Some of us actually hope that our President does not fail. We dare to hope things will get better. Since TANF was released last Thursday, things are already starting to look a little better. No one's naive enough to believe that the good jobs are coming back from over seas, of course. Obama's stimulus to cause that was immediately shot down for being too complicated. But at least, if we could get back to the pay levels we had 20 years ago, we could adjust. So, the hope is that TANF will be able to overcome the dreaded credit card ‘uncollectibles' that we know will only get worse at an accelerated rate. Maybe, the credit card lenders will be shored up enough by selling some of this toxic debt to investors, they will be able to start lending again. With an outstanding $971 billion credit card debt and no jobs, the astronomical default rate has taken us back 20 years.
As a result, nearly half of our nation's credit card lenders have had to lower credit limits. They're being forced to close inactive and high-debt credit card accounts by the millions. As far as 90-day delinquencies (the worst kind), the worst-off states right now are Nevada, Florida and Arizona – in that order. Interestingly, these places are also the worst hit for unemployment and housing.
We don't have figures as to why these people have racked up so much credit card debt but a little introspect should go a long way. We know that consumers have already cut back on credit card spending even before the Christmas season. So much for the frivolous aspect.
We also know that the most common cause of bankruptcy has been medical care for years now. We're the worst ripped-off country in the industrialized world. If I were in medical need and was turned away for lack of cash (as has actually happened) and, I was facing bankruptcy anyway…sure, I'd rack up those credit cards. What are they going to do? Take back my health because I didn't pay?