Bidenomics and Credit Card Debt

You can vote your way into socialism, but you have to shoot your way out.

By Robin Itzler

Editor's Note:  This is one of the commentaries selected from Robin's weekly newsletter Patriot Neighbors. Any cartoons appearing will have been added by me.  If you wish to get the full edition,  E-mail her at PatriotNeighbors@yahoo.com to get on her list, it's free.  RK

 

  

Getting the truth about Joe Biden’s economy from Joe Biden is like spitting into the wind and expecting to avoid getting wet.  It will not be heard from by Joe Biden, he and the Democrats spin, twist, distort, and obfuscate in order to give the impression everything is just dandy, he's created "new" jobs, as  Sen. Rick Scott shows is simply another lie.  

With Joe Biden eating ice cream in the Oval Office, anyone who wants to purchase a house in 2024 will spend one-third to one-half MORE on their monthly mortgage payment compared to what they would have spent when Donald Trump was in the White House. Interest rates on 30-year fixed-rate mortgages are now between 7 and 7.5 percent. In 2020, 30-year-fixed rate mortgages averaged 3.38 percent, according to Bankrate data.

$500,000 home at 7.5 percent = $3,496 monthly mortgage.

$500,000 home at 3.3 Percent = $2,190 monthly mortgage.

What are Americans to do?

Charge everything! Use plastic money! According to Lending Tree, the average credit card interest rate is a huge 24.66 percent. Thanks to Joe Biden and Democrat policies, credit card debt is soaring. According to a survey by Scholaroo, a national firm that matches college students with potential scholarships, the U.S. national average for credit card debt is a whopping $6,555.

New Jersey: has a massive average credit card debt of $8,155.

Mississippi: is the lowest with a still very high $5,295.

Do you think people with this large amount of debt are paying just the monthly minimum?  

GUESS!  500,000 disappeared in America?  

Half a million—that’s an alarmingly large number and yet the Biden administration doesn’t seem to care that 500,000 are gone. Kaput! No más! Farewell! No matter how much we look, these 500,000 might be gone forever. 

So then, what disappeared? 

Full-time jobs are disappearing When the Bureau of Labor Statistics announces its monthly jobs report, it includes ALL jobs—both part-time and full-time. However, over the past year 500,000 FULL-TIME jobs have disappeared. The jobs growth the Biden administration keeps touting is from part-time positions. The jobs report is a game that sadly deceives most Americans. 

 “Well That Didn’t Work”.  How's that for a title to a book about communism?

 

Bastiat and Credit Card Regulations

March 15, 2024 by Dan Mitchell @ International Liberty

I have a three-part series on why price controls are misguided (here, here, and here). In this clip from a recent appearance on Vance Ginn’s Let People Prosper, I look at the specific example of price controls on late fees.

While I think my points are sound, I confess they are not original.

 

I’m simply recycling the wisdom of Frederic Bastiat, who succinctly and accurately explained way back in the 1800s that you can’t analyze an issue without considering the secondary effects (the “unseen”).

In this case, limiting late fees on credit cards will lead to negative effects in other areas.

I’m not the only one to make this point. The Wall Street Journal editorialized about this issue a few days ago. Here are some excerpts.

If Americans see their credit costs increase, access to credit decline, or card rewards disappear, blame the Administration’s new price controls. The Consumer Financial Protection Bureau (CFPB) last week finalized a rule effectively capping credit-card late fees at $8… Yet as even the CFPB acknowledges, the lower penalty may cause more borrowers to pay late, and as a result incur higher “interest charges, penalty rates, credit reporting, and the loss of a grace period.”

This would make it harder to qualify for an auto loan or mortgage. The agency concedes that credit-card issuers may also raise interest rates, reduce rewards, “increase minimum payment amounts or adjust credit limits to reduce credit risk associated with consumers who make late payments.” Because some states cap credit-card interest rates, “some consumers’ access to credit could fall.”

Thanks, Mr. President. By the way, the rule comes as credit-card delinquencies have risen to the highest level in more than a decade. …The Biden Administration is playing up its price controls as an election-year gambit, but it never explains the unseen effects down the road. The forgotten man always pays.

By the way, the editorial includes this bit of bad news caused by a different example of financial intervention.

Consumers are the biggest losers, as we’ve learned from other such price controls. The Durbin Amendment to Dodd-Frank directed the Fed to limit fees charged to retailers for debit-card processing. A 2017 Federal Reserve staff study found that as a result larger banks reduced free checking and raised minimum balance requirements. Small banks not subject to the cap also limited free checking because they faced less competition. Rather than lower prices, retailers pocketed the savings.

And I wrote earlier this year about another example of the Biden crowd imposing red tape on the financial services industry.

The bottom line is that more government is only the answer if you’ve asked a very strange question.