Mon, 02 Apr 2007

James Scurlock on Fixing the Credit Mess

This sounds like a fine film. He's right about one thing - people do need to take responsibility for their screwups, and a lot of the debt problems we (and, honestly, I) have are the direct result of our screwups.

But the problem I have is, do they owe what they borrowed plus a little interest or are they responsible for three, four, five times what they borrowed? That's what we used to call "usury," and that's not only unrealistic but it's ruinous. It's extremely important for people to be responsible for what they borrowed, but when you have these contracts that Harvard Law School professors can't understand, and fees and interest rates that no one can be prepared for, it's just setting people up to fail.

I can remember watching a movie when I was a kid about gangsters and "loan sharks" - they were charging 25% interest and the Feds were hot on their tails. Today that's the default rate from most credit card issuers... it cannot continue, and will eventually collapse in on itself as nobody will be able to pay the bill or purchase the seized property.

I feel like we're seeing the old curse come full circle: "May you live in interesting times."

James Scurlock's film Maxed Out takes a hard look at the American lending industry and how it has enabled the country's spiraling debt. Scurlock, a business school dropout who opened and sold four restaurants before he turned 25, discusses recent shakeups in the business world and where both debtors and lenders should go from here.

(link) [U.S. News & World Report]

/Politics | 1 writeback | permanent link

On 4/17/2007 09:55:43
Unfair wrote

interchange is another problem

comment...

 
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