Economics:

"An alternate view of the Credit Card Bill of Rights: What could be it's Long Term Ramifications?"
-An article by Nero

On May 20th 2009 Congress finally passed the highly touted, and in their view desperately needed, credit card bill of rights law and sent it to President Barack Obama for his signature. The bill, pushed through by heavy criticism of the credit industry, banks, financial institutions, and any other organization the American people choose to fix their blame upon, contains numerous provisions that are supposed to protect the American people from unfair practices in regards to their credit cards, namely the raising of interest rates, penalty fees, etc. It also contains provisions for protecting those under 18 and college students from getting sucked into spending money they don’t yet have by preventing companies from seeking them out. Once again, the good old government is looking out for its citizens, right?

Now you may ask, what could I possibly find wrong with this law? It’s supposed to help me, protect me, and prevent the evil, evil, and even more evil financial institutions from hitting me with unfair fees and interest hikes. This is the government protecting me from companies that just see me as a stepping stone to another high paid bonus, private jet, or mansion in some warm tropical climate. The government cares about me and is just looking out for me, what’s wrong? Well, an old quote comes to mind from a former and dearly respected President: “The scariest thing you can ever hear is someone knocking on your door and saying ‘I’m from the government and I’m here to help.”

 Don’t get me wrong, I think this bill has some good provisions, especially attempting to protect children from getting credit cards while too young and misusing them. But after reading the provisions of said bill, a question comes to mind: why does the government need to mandate certain provisions of the bill that, in all honesty, should be common knowledge? Children aren’t supposed to have credit cards, was there ever a time when that wasn’t true? Students should have strict limits on their lines of credit because they aren’t expected to have a high income, again, something that I thought everyone realized. To me, it sounds like the government is doing something it shouldn’t be doing with this bill: doing something people should be doing for themselves through their own Personal Responsibility.

Now again, don’t get me wrong, there are times when I believe government monitoring of certain aspects of my life is necessary. I like that the government sets mandates that my food can’t be laced with cyanide, that my home can’t be fire proofed with asbestos, and that my car shouldn’t explode when I start up the engine. But how much intervention do we really need? Is this a critical measure that was absolutely necessary to my safety like the examples I just listed? And if the government is worried about credit card companies screwing me over, why not intervene with my mortgage lender, utilities, grocery store, the place where I bought my car, or any other institution where I spend money or take out a loan? In other words, because I can’t be trusted to handle my own affairs and priorities, why doesn’t the government just take over and do it all for me? The safe, protecting, government?

The point is, I don’t think it should. While this bill sounds ideal and great, I think it can lead to some bad repercussions. I worry that it could lead to the government regulating more aspects of my life than it already does. I worry that this bill could prevent financial institutions from giving out even more credit lines, keeping us in this current recession. But most of all I worry that bills like this could make the American public complacent and give them the impression that I already feel is too prevalent, “I don’t have to worry about things myself because the government knows what I need and it looks out for me, so I’m just dandy”. As I write this, Senator Dodd, the financial genius largely blamed for the AIG bonus blunders, has stated that he wants to further put a cap on interest rates at 15 percent for any credit cards. In other words, regulate the credit industries which, basic economics tells us, will simply drive down the supply of credit from the companies because they know they won’t make as much profit. Ideas like this not only seek to damage our economy, but the psyche of us Americans. It attempts to leave us complacent and gullible for the next government intervention scheme, which may actually cause more harm than good (nationalized healthcare anyone?)

So as you enjoy your new freedom from those evil credit card companies, you may want to wonder what next plan the government may want to pass into law, all in your name and benefit…