Our friend from the government is here to help us-now we’re in trouble!

Our friend from the government is here to help us-now we’re in trouble! Washington weighs in on consumer protection-but missed the real boat


Yep, it’s an overly long title, and an extremely serious topic. The president and congress are now taking steps to protect us (God help us) from the “Big Banks.” Well it was about damn time! Let me clue you in, the mortgage –housing problem is only half the problem, the proverbial other shoe is unsecured credit card debt, let me cite you a few statistics: (thanks to www.creditcards.com).

• Average credit card debt per household with credit card debt: $15,788*
• Total credit cards in circulation in U.S: 576.4 million, as of yearend 2009 (Source: Nilson Report, February 2010)
• Total debit cards in circulation in U.S: 507 million, as of yearend 2009 (Source: Nilson Report, February 2010)
• Average number of credit cards held by cardholders: 3.5, as of yearend 2008 (Source: "The Survey of Consumer Payment Choice," Federal Reserve Bank of Boston, January 2010)
• Average APR on new credit card offer: 14.10 percent (Source: CreditCards.com Weekly Rate Report, May 2010.)
• Average APR on credit card with a balance on it: 14.67 percent, as of February, 2010 (Source: Federal Reserve's G.19 report on consumer credit, May 2010)
• Total U.S. revolving debt (98 percent of which is made up of credit card debt): $852.6 billion, as of March 2010 (Source: Federal Reserve's G.19 report on consumer credit, March 2010)
• Total U.S. consumer debt: $2.45 trillion, as of March 2010 (Source: Federal Reserve's G.19 report on consumer credit, May 2010)
• U.S. credit card 60-day delinquency rate: 4.27 percent. (Source: Fitch Ratings, April 2010)
• U.S. credit card default rate: 13.01 percent. (Source: Fitch Ratings, April 2010)
Total bankruptcy filings in 2009 reached 1.4 million in 2009, up from 1.09 million in 2008. The vast majority were personal bankruptcies -- Chapter 7 and Chapter 13. Business bankruptcies made up 6 percent of all filings. (Source: AACER, the American Bankruptcy Institute, January 2010)
Clearly the American Consumer is in trouble, but why?
Americans at least the vast majority of Americans are decent hard working extremely giving people, just take a look at charitable giving, the world has never seen, nor will it ever see again, a people so enormously generous. According to the National Philantropic Institute 89% of American households give. (Thanks to http://www.nptrust.org/). This is part of the American psyche hardworking and giving, so it is extremely unlikely if you buy off on my presupposition of the American psyche, that Americans would be ducking their obligations. The reason is that Americans are not able to pay.
This brings me back to primary theme of this blog, small to medium business, entrepreneurship, and jobs. What America and Americans needs are jobs and they are not going to be provided by big business or labor unions. What is needed is a leg up for the small to medium businesses of America not another regulatory commission for greedy bankers. The main idea is that Americans should not need credit cards in the first place and if there were enough decent paying jobs, the need for credit cards and it’s new regulatory commission would be moot.

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