The Stimulus of Debt

As we’ve all heard about by now, most of us should be receiving checks in the mail throughout the summer, courtesy of Uncle Sam.

The downturn of the American economy has prompted every Presidential contender, and every member of Congress to be the first to present a plan to save ourselves from recession.

Lucky for us, they reached an agreement… and we all get some extra money.

Our good friends in Washington, bless their hearts, seem to believe that this stimulus package will prompt folks like you and me to rush out to Wal-Mart (or, preferably Costco or Target), and buy a new flat-screen television.

The idea, of course, is that we consumers will use the money to consume! This consumption presumably leads to an increase in demand, and in turn leads to more production, etc. etc… a domino-effect of rising GDP and increasing stock prices. Fun for all.

Before I go further, let me tell you how my wife and I plan on using our $1200 check. We are going to use it to help accelerate paying off our credit card debt (which isn’t all that high, just so you know).

My wife and I are not alone. Consumer credit rose $5.2 billion in February of this year.

An estimated 115 million Americans carry a monthly balance on a credit card, according to a PBS/New York Times documentary from 2004-2005 (which has undoubtedly increased in recent years).

The average family credit balance, according to that same program, is $8000. Keep in mind, that that total more than doubled in just 10 years. That was 4 years ago. And we all know things have gotten worse since then.

So, where does this stimulus package get us? If my suspicions are correct, most recipients of this government check are doing the same thing as my wife and I: paying off something we’ve already consumed.

The point of all of this, is that the politicians in Washington don’t seem to “get it.” The so-called “stimulus” amounts to nothing more than a temporary fix at best, and a government subsidized debt payment at worst. I won’t complain about having $1200 to use to pay off some debt, but the cost of that will come with rising prices elsewhere (since the government is borrowing the money to pay for the stimulus package to begin with).

Solutions? In my mind, if our elected officials really want to help, they should turn their focus toward long-term fixes. Perhaps a starting point would be to actually do something about the predatory practices of credit card companies (watch that PBS video). Maybe we should start with putting a limit on the rate of interest banks can charge for a credit card balance. Wouldn’t that do more good in the long-run than the current borrow-and-patch policy from our “leaders?”

Currently, the right to regulate credit interest rates resides with state governments. But the right of one state really has no bearing on what another state will allow. For instance, if Missouri were to regulate the rate at, say, 12%... as long as another state allows for a rate of 30%, that credit card company can set up shop in the 30% state, and effectively export that rate of credit wherever it wants. No joke. What difference do state's rights make when another state can effectively over-ride another's regulatory power?

Recently, there was a congressional hearing on a Credit Cardholders Bill of Rights. A number of issues were touched on... all of which seem to be good starting points.

What do you think? Taking your calls, starting now…

Welcome to Mid America Calling

If you found your way to our humble blog, welcome! We hope to raise questions, discuss issues, and maybe, just possibly find some answers. Here's hoping you're up for the dialogue. Allow us to introduce ourselves, as we begin what will hopefully be a long, arduous and rewarding process, talking about these issues with you, the body politic.

So who are we? We're just two young men, as you see before you, taking cover from the crossfire of rhetoric and vitriol, trying to make our way through this life. We're watching our country and our people waste their time trying to be on top, instead of being working for solutions. There's a whole economy built on the politics of anger, one that depends on us avoiding sensible and rational examination of the issues. This is the Age of Outrage, where polarization and dogmatism rule the day, and we are done with it. Modern political discourse is so often limited to cheap shots and umbrage at the words of the opponent. There is no substance in such an age, only bellicose posturing, which is as routine as it is empty. It's not getting us anywhere, and considering the challenges that lay ahead, we need to change that paradigm right now.

Mid America Calling is our humble effort to jump-start some dialogue and discussion. Our Mid America is a concept, not a geographic entity; those of us that do not self-identify with a given party or ideology above all, who examine the issues even-handedly, are uninterested in dogma, and devoted first and foremost to the advancement of our nation. Advancement means moving forward into a new era. It means, at the same time, shrugging off the weight of our history and failures while drawing on our successes and our common experiences - using our past as a tool to illuminate our future. It means combining our self-reliance and moral systems with a do-it-yourself revolutionary zeal. It means taking charge of our own problems, and solving them at the level closest to our lives.

Mid America is calling you- we are shouting it out as best we can, that our view of this country needs to change. We are speaking truth to the ultimate power in this country- you, the citizen, the final arbiter of what happens here. If you doubt that power, then this is not the place for you. But, if you feel as we feel, we hope you find what you are looking for with us. It's a nerve-wracking world out there if we let it be- terror, bankruptcy, disease, disaster. So let's not delay. Let's get to work, because by God, that's the American way.

Here’s a written tip of the hat to Pete for his introduction to our site. After reading that intro, I couldn’t really think of anything I wanted to change too much or add because he did such a great job of saying what this “Mid-America Calling” is all about.

But I want to take a moment to drive home a point a bit. That point is this: Mid America Calling is about YOU. No matter who you are, or where you’re from, this site is about giving voice to all of the folks in this country who are proud and happy to call themselves Americans.

This isn’t about politics, or ideology… You will undoubtedly be able to guess and figure out what our own personal political leanings might be (those things have a way of peeking out no matter how hard you try to hide them), but this site is intended to go beyond those surfaces and dig deeper into the real problems that each and every one of us face every day.

There are serious problems out there. We should be about serious solutions. Each of us have the power to put our minds to work in coming up with those solutions, and ultimately that is what Mid America Calling is about. You are encouraged to voice your thoughts and propose solutions.

We will put issues on the line, and hope you readers take things even further... So, without further fanfare – The first calls are coming up… get ready to pick up the phone…