New Bankruptcy Law takes effect Oct 1st.

[Dinner]

70% of the US economy is based upon consumer spending (also in the linked article). It is dangerous to toy with something that big just because Chase Manhattan paid Sen. Biden X number of dollars for special legislation to make them more profitable.

[Imran Siddiqui]

Originally posted by Oerdin
70% of the US economy is based upon consumer spending (also in the linked article). It is dangerous to toy with something that big just because Chase Manhattan paid Sen. Biden X number of dollars for special legislation to make them more profitable.

So what you are saying that even though our savings rate is abyssmal, we should just ignore it, because consumers are spending? Short term gain over long term catastrophe?

I'll take a short recession in order to improve our savings rate. Asia isn't going to bankroll us forever.

[KrazyHorse]

Originally posted by Oerdin
The two most common reasons for bankruptcy by far are divorce or illness. If you don't have health insurence or your marriage is on the rocks don't buy anything (especially a car) because you can't get rid of the debt if your life goes to hell

Eh. If you have to declare bankruptcy because of a divorce then the divorce laws are obviously wacko (which they are).

If you have to declare bankruptcy because of an illness then blame the barbaric nonexistence of universal health care in your country.

Don't lump in all bankruptcies together and claim that we should feel sorry for them. I can guarantee you that a very significant percentage of bankruptcies are caused by overspending.

[Patroklos]

illness

Perhaps they should use some of that credit to buy health insurance instead of those new rims or a bass boat eh?

Yeah, what a crazy idea.

[KrazyHorse]

Originally posted by Imran Siddiqui


So what you are saying that even though our savings rate is abyssmal, we should just ignore it, because consumers are spending? Short term gain over long term catastrophe?

I'll take a short recession in order to improve our savings rate. Asia isn't going to bankroll us forever.

Exactly. In the short term low savings rates to kick-start an economy are fine. Long-term overspending is ****ing stupid, and that's what the US has been in for at least 15 years. It's gotten to the point when David Dodge (governor of the Bank of Canada, our equivalent of the Fed) made a public statement berating the US for its low savings rate and pointing out the obvious dangers inherent in a long-term imbalanced flow of capital and investment. He's scared that unless the Fed switches from its expansionary model (something they finally appear to be doing) the world economy is going to be devastated when the credit crunch comes.

[KrazyHorse]

Originally posted by Patroklos


Perhaps they should use some of that credit to buy health insurance instead of those new rims or a bass boat eh?

Yeah, what a crazy idea.

Perhaps the government should provide health care to all citizens.

What a crazy idea.

[Patroklos]

Perhaps the government should provide health care to all citizens.

What a crazy idea.

That is not only crazy, but also stupid.

However, what I was trying to say is not only do Americans live in debt, there debt is spent on frivolous things while they go without auto/health insurance and other basics.

It is the hieght of irresponsibility, and in my opinion decadence.

[KrazyHorse]

Originally posted by Patroklos


That is not only crazy, but also stupid.

[KrazyHorse]

The US system is overpriced (~70% higher per capita health spending), fails to meet the needs of a large percentage of the population (~15%) and provides marginally better service to those at the top rung than do the public health systems of all other first world nations

You tell me who's the sucker.

[Patroklos]

Does anyone travel to the UK for a heart transplant if they have a choice?

Thought not

We disagree, lets leave it at that. This topic deserves its thread.

[KrazyHorse]

Originally posted by KrazyHorse
provides marginally better service to those at the top rung than do the public health systems of all other first world nations

But I agree, the low savings rate of Americans is a separate topic.

Though you have to realise that it's often easier to get a loan to buy an asset than it is to get a loan to buy health coverage (since the seller can always repossess the asset, whereas you're not increasing your collateral when you use credit to buy health insurance)

[Patroklos]

You are right, but credit cards don't care what you spend the credit on.

[KrazyHorse]

And credit cards also charge an interest rate of 15+%

[KrazyHorse]

Right now my annual income is near 20000$ (give or take a few bucks)

I got a credit card when I moved to the US in August 2003. They gave me 1800$ credit line with no credit history, no assets and only a letter which said that I had a job and listed my salary.

I use my credit card to buy virtually everything and pay off my entire balance at the end of each month. After one year with the card they increased my credit line to 2800$. After two years they increased my credit line to 4800$.

That's more than a little bit insane. That's part of the problem right there. There's a culture that says that it's okay to carry debt...

[MosesPresley]

The support for this law seems to be based on a moral stance about debt and a perception that "Most Americans act like its no big deal to declare bankrupcy" or that they are blowing their money on "new rims or a bass boat."

Where is the proof for these perceptions? Show me that and I might agree with where you are coming from. But from what I understand, this law is going to ream people who lost their incomes due to serious health problems. We shouldn't screw the weak, just because you have some anecdotal evidence that there are some abusers. There are abusers, but you don't go after them at the expense of the truly unfortunate, because it offends your morality that a few people are blowing their money on "new rims or a bass boat."