Obama’s Plan for Credit Cards: Reward Irresponsibility and Penalize Integrity

It has become a noxious pattern by the Obama Administration in their proposals and legislation: penalize the productive and reward the irresponsible. As a response to the real estate collapse, he has recommended cram-downs whereby judges could unilaterally reduce the principle amount of a mortgage in favor of the often irresponsible buyer thereby invalidating the agreement. The far reaching implications of this would mean that no contract would be worth the paper it is written on. (Of course, this would be a metaphor for Obama’s promises and his real intent and actions.) Who would suffer by this action? Everyone else who has been paying their mortgages on time or those who would like to purchase a home. The mortgage rates they would now be facing would be artificially higher – an unjust cost of subsidizing those who have been dishonest or irresponsible.
The Obama administration has its fingerprints on many of these same schemes of involuntary wealth transfer from productive individuals and corporations. Examples include multiple taxation proposals (Federal income taxes, Social Security taxes, Medicare taxes, Long term capital gains taxes, etc.), the selective bailout of failing companies and especially those with a large labor union workforce, healthcare reform proposals and even environmental issues.
Now we have a new arena ripe for Obama’s socialist mandates: the credit card industry. Reforms are clearly warranted here as there have been many egregious abuses by banks and other lending institutions. Despite some of what you may read (including in the article below), in its present iteration, several of the proposed changes would provide greater reward to those who are irresponsible, profligate spenders and penalize those who pay their bills on time. Competitive constraints levied on these companies by legislation would limit their options to reward those who are a better financial risk.

Credit Card Industry Aims to Profit From Sterling Payers

Posted in Congress Credit Cards Financial Obama Taxes with 2 Comments

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