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Wednesday, April 30, 2008

American's Crushed Due to New Bankruptcy Laws

An Introduction by Mr. Unloadingzone to an Incredible piece of writing by Marc Chamot:

It used to be if your financial circumstances overwhelmed you, Americans had a chance to start over through bankruptcy. But in 2005, Congress and the Bush Administration sold out to the banking and credit card industry and overhauled the bankruptcy laws. Here's an example: a down-sized husband who can't find a job in today's market. His family has been living off their credit cards; using them to pay other bills. Amazingly, they qualify for a Chapter 7 bankruptcy which wipes away all unsecured debt....but they can't file.

Why? Because they're living off the last of an insurance annuity and if they file, the court will declare it an asset and cease it. If they do file, they have no unsecured debt, but they also don't have enough money coming in to pay their bottom line cost of living, and the annuity money that was supplementing that is now gone. And believe it or not, they're the lucky ones.

Very few qualify for a Chapter 7 since 2005: they now have to file Chapter 13. They don't escape their unsecured debt; they just have 5 years to pay it off. No fresh start. No chance to start over. All because the Banks and Credit Card companies, whose outrageous interest rates easily covered their losses under the old system, wanted even more profit. And Congress wrote the bill to their specifications and President Bush signed it without hesitation.

Fast forward to 2008. The economy is in recession and has been: the Fed just wouldn't admit it. The dollar has plummeted, worth only around .62 Euro. Oil prices, partially because they're tied to the dollar, are at their highest levels ever and rising. By next year, $200/barrel oil isn't a possibility, it's highly likely. Even if the dollar recovers, OPEC has gotten used to $100/barrel pricing and likes it. We'll never see oil below that again.

Unemployment is up, suddenly much higher than the Government figures originally showed. Food prices, especially staples like flour, bread, milk and rice, are quadrupling in price. But they don't reflect in the Consumer Price Index. If they did, inflation would be off the charts.

The housing market is collapsing much as 30% in some areas. People now owe more for their homes than they can sell them for. And Washington's solution is to talk and talk and talk. Oh, and lower the interest rates. Couple that with the dollar's weakness, and suddenly the the Bonds funding the National Debt aren't so attract to the Chinese and others who have been propping up our economy. They're getting harder to sell.

America is in the greatest financial danger since the Great Depression. My solution is to take just one of Ron Paul's idea's: we spend more on "National Defense" than the entire world combined. It's time we stopped being the World's police force and army. It's time to close the 160 bases overseas, bring the troops home, sell off the assets of the bases at fire sale prices to the host countries (it's cheaper than shipping them back here) and save one Trillion Dollars a year. We literally could pay off the entire national debt AND eliminate the personal income tax for everyone.

The rest of the World will have to fend for itself: we can't afford Pax America any longer.

My good friend Marc Chamot, in the Marc Chamot Report, blogged an outstanding piece explaining the horrific damage done by the Bankruptcy Overhaul Sell-out of 2005. Here's what he has to say and it's well worth reading: just make sure you're sitting down while you do.

The Marc Chamot Report, News and Opinions & Commentaries on National & World Events.: America in Turmoil No Way Out; the 2005 Bankruptcies Overhaul Bill is Killing Americans & the Economy; Americans unload prized belongings: Add to Digg DiggIt! Reddit Reddit Stumbleupon Stumble This Google Bookmarks Add to Google Bookmarks Yahoo My Web Add to Yahoo MyWeb Technorati Add to Technorati Faves Slashdot Slashdot it

1 comment:

Anonymous said...

It's a nightmare. Your comments were upsetting enough but Mr. Chamot's story just leaves you speechless.

What's next, selling pencils on the corner? How are we supposed to live?

Mrs. Unloadingzone

Mrs. Unloadingzone
"The Girl of my Dreams"