Thursday, October 30, 2008

Full Circle

Credit card issuers have discovered that maybe it's sometimes in their interest to forgive a portion of credit card debt. They've realized this after they lobbied hard to make bankruptcy a worse deal for consumers. Instead of declaring bankruptcy, people now just walk away from their debts. Now they want the government to make it easier for them to forgive credit card debt by making the tax treatment of forgiven debt more generous.

Bankruptcy protection, like limited liability, is there because the system doesn't really work without it. Unbalance the system too much by messing with them and it stops working. Heckuva job, credit card lobbyists.