yes, people should not be living on credit so much.
What would those people do if they didn’t have credit cards?
a. live within their means
or
b. go to loan sharks
I’m going to guess they’d choose b
Debtors prisons didn’t stop people going bankrupt, but then it stopped people taking risks.
I think it is bad to stop people taking risks - the USA is innovative primarily because there is no stigmatism to going bankrupt. So people try new things and fail.
In Germany or France it is practically a sin to go bankrupt. So innovation is far lower.
that’s a trade-off, isn’t it?
Credit card delinquencies are near historical lows. Delinquencies are up in student and auto loans.
The 2005 Bankruptcy Bill made it harder to file Chapter 7 (liquidation of dept). I remember the stories of people running up 10's of thousands of dollars in CC debt. They would get the debt wiped out and do it all over again.
I think our personal debt issue is much more related to the fact that as our standard of living fell for the past few decades (as a result of “globalization”/competing with the developing world for jobs), people simply pretended it was 1985 and borrowed to finance their lifestyles. As they lose real jobs from the “before-times” and replace them with the McJobs available, it is impossible to repay the loans. Student loan debt illustrates this perfectly, as most students can only get McJobs (they are too young to hold any of the remaining good jobs).