The Bush Administration failed to monitor and regulate the financial institutions in the last eight years. The Reagan Administration began the deregulation of the financial and insurance industries and the current Administration almost brought to completion the deregulation of these industries.
When the Republicans had control of the Congress and the Presidency they were able to push through a Bankruptcy Bill which gave the financial institutions the ability to implement punishing interest rates on borrowers. The Bill allowed creditors the right to raise rates based upon a borrowers bill paying history not related to the creditor raising the rate. Creditors are charging interest rates up to 40% thanks to the Democratic support of the Republican Bankruptcy Bill.
The loan sharking interest rates and easy credit approval has sunk the the working and middle class into a morass of debt that can never be repaid. It has affected the health of the financial institutions and forced the government to bail out these corporations with tax payer money.
The solution for a Congress and President that cared is to repeal the last Bankruptcy Bill and re-institute Usury laws capping debtor interest rates as it was until the Reagan Administration began the process of deregulation, a moving cap based on an index of inflation. Arkansas has a law capping interest rates that is fair to the borrower and the lender.
Restricting interest rates to a reasonable level would insure that more debt is repaid and repaid in a timely manner. When the repayment to debt ratio is stabilized the economy can get a stimulus from credit purchases, creating more jobs and growing the economy.
The next President with a visionary Congress must break away from the lobbyists of the Financial Institutions and do what is fair and right. The function of Government is to enhance the society which it governs, it must level the field so that all have equal access to life, liberty and the pursuit of happiness.
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