Just as buying sprees in the stock market lead to panics, excessive private borrowing leads to slower but ultimately more damaging downturns. I propose passing a law phasing out the right to have any debt that isn't fully secured. I understand that suddenly banning all unsecured debt would bring the economy to a halt, but if the law were gradually enforced in different sectors of the economy to varying degrees until it was made total in the entire economy, then the people would gradually grow accustomed to it and economic instability would nearly disappear- unless I'm missing some key part of the equation. I wonder, therefore, what the economic experts on the site (I'm not one) think of this idea. I appreciate all replies. Thank you very much.

__________________
"I am a Tory Anarchist. I should like every one to go about doing just as he pleased- short of altering any of the things to which I have grown accustomed." (Max Beerbohm)

You answered your own question.

__________________
I wasn't born with enough middle fingers.

am not a financial expert by any means but I have plenty of experience borrowing money! Does that count?? I am not sure what you mean by "fully secured". Do you mean that a debt would have to be backed by real assets or co-signed by someone with assets? That would be unrealistic. However, I think that Congress really dropped the ball on the bankruptcy bill. When you buy a house the bank will scrutinize your financial standing, the value of the house, your credit rating and your ability to carry the loan. Why credit card companies are allowed to extend credit freely and raise rates to usorious levels for the offense of a single late payment- that, I do not understand! I am very careful, but I have heard about people who make one late payment on one card and then ALL of their cards' rates are raised to 22%. If the banks can share info about one late fee, then why can't they refuse to issue a card when they see that someone has more available credit than they could possibly sustain if they max out their cards?. Also, these very high interest rates should not be allowed.

Why? They are fully disclosed before you get the card. What's the problem?

__________________
I wasn't born with enough middle fingers.

Okay, this was another bad idea of mine (no surprise). Back to the drawing board.

__________________
"I am a Tory Anarchist. I should like every one to go about doing just as he pleased- short of altering any of the things to which I have grown accustomed." (Max Beerbohm)

Lenders have responsibilities, too. Some practices are not allowed in the mortgage lending market, why are these same practices allowed in the credit card industry? There is no practical financial rational for changing an individual's interest rate from (say) 9% to 22% because of one late payment. I would like to see high school kids have classes in financial management so they will not be caught unaware by deceitful lending practices. That would be a small step in the right direction

I am against usury laws. But regardless, the terms and conditions are spelled out in plain English.

I fully support high school classes on both econ and personal finance. Folks in this country need that.

__________________
I wasn't born with enough middle fingers.