This was a PBS documentary & you can watch it below or watch it in Netflix. The accompanying text of the new Credit CARD act can be read from the White House’s website (http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/)
After watching all this, I still believe in the following will happen in the next year or two
- Consumers will tend to start borrowing again at atrocious rates
- Banks will find newer ways to bilk money out of people
And below are my reasons.
The American public were shielded from the fullest blow of this financial meltdown and did not create a generation of frugal & cautious people. The government with the help of private bankers stopped the financial meltdown with a vested interest. All the politicians need to be re-elected & the bankers needed to survive. A full blown impact (would have happened without the trillions brought from thin air to save the economy) would definitely have created generation that was lean in fiscal terms and would have known to live below their means. This is not the case today & history will repeat itself in a decade or so. The decade number is not pull out of thin air though, it is length of a financial memory after a recession (remember the 80s, 90s & the 2001?)
Though the guys running the FDIC, Feds & Treasury are the smartest people you can find their lives don’t depend on these rules. I bet all of them pay their bills on time & do not care about the interest rate the bank puts on their bill (remember I mentioned do not care, not do not know). For the bankers on the other hand, their life depends on it (their salary, bonus, next term contract). They are not any less smart & have vested interest. Obviously the latter wins.
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