THE CONGRESS, USURY LAWS, CREDIT CARDS AND THE EXCESSIVE FEES YOU PAY

I was really proud of Congress this week: finally holding hearings on Usury - the excessive interest and fees people are forced to pay to their credit card companies.

Or at least they held hearings about the travails faced by the people who pay their monthly payments on time and still get their interest rates and fees hiked.

Even though they play by the rules.

Congress attacked the credit card companies’ greed.

Except the Congress has no one to blame but themselves. And you need to know that.

Back in the middle of the night in 1980, Congress passed a bill that eliminated the Usury Laws. Before 1980, states didn’t think anyone should have to pay more than 18% interest. So they passed Usury Laws, defining excessive interest as anything over 18%.

By the way, the states weren’t doing anything so unusual. Most of the world’s religions forbid usury. Some even forbid charging interest.

However Congress voted to delete the States’ Usury Laws. With one law, they gave the banks and credit card companies permission to charge you anything they like. In interest and in fees. And these days, you’d probably be paying less interest to your friendly neighborhood loan shark than to the companies who issue the plastic in your wallet.

The elimination of usury laws by Congress is contained in the National Bank Act (NBA) and the Depository Institutions Deregulation and Monetary Control Act of 1980.

Until March 31, 1980, when Jimmy Carter signed the bill into law, interest had been capped at 18%. According to Philip Farley, manager of regulations assistance at the Federal Reserve Bank of Philadelphia, "But the lobbyists said it was counterproductive because if rates were too low, lenders would not allow for mortgages or credit cards."

In other words, if they couldn’t make more than 18% on the money they loaned you, they wouldn’t loan you money to buy homes and Christmas presents.

Yeah, right.

Even 18% interest and fees per year can be a major brake on economic growth because that money is not going to buy new goods and services, but to service old debt. Which does not grow the economy (unless you’re the among the top echelon employees of the credit card companies, and your salary and options explode upwards).

In light of my belief that GOVERNMENT'S FUNCTION IS TO PROTECT THE WEAK FROM THE STRONG, I believe it’s time to bring back Usury laws, cap all interest and fees on credit card transactions at a TOTAL of 18%.

And if you can’t qualify for a loan at 18% interest and fees, then perhaps you shouldn’t be using credit to buy things. Perhaps you should save first and then buy it with your savings.

It would cost you a lot less.

REBOOTING AMERICA

Government is broken. The way we finance government is insane. We launch wars we can't win. Politicians frighten our citizens to keep themselves in power. Political parties no longer work together to serve the people they are elected to serve. Health care in the United States is a scandal. Taxation is unfair. People pay more attention to celebrities and spouse-killers than to what's really important in their lives. And while politicians keep telling you America is the best country in the world, the reality is - it's not.

But it CAN work again.

When your computer locks up, you reboot it. It restarts, and all the programs work again.

It's time to REBOOT AMERICA so it works again. It's time to REBOOT GOVERNMENT so it works better at delivering services fit for the 21st Century.

I've been thinking of ways to reboot America for many years now. In the weeks ahead, I'm going to put forth proposals to fix things and I'd like your feedback. Let's discuss these ideas. Argue passionately about them. If you don't like mine, come up with your own.

But these are things we need to reboot:

The way we FINANCE GOVERNMENT. Taxing income with no relation to government services makes no sense. When expenses are greater than income, the government borrows money, selling pieces of the US to foreigners; when income is greater than expenses, they just spend more money. Instead of a taxation system where those with deductions pay less or nothing and the people who make incomes in the huge underground economy pay nothing, eliminate the tax system. No more deductions. No more spending days filing tax returns. Congress should set the budget and priorities and then Government should bill each and every person and business to pay for their share of the budget each month. Government should itemize what you're paying for just like your cable TV bill does (and if Congress votes in some expensive new program, your bill will go right up - one way of controlling government spending is to force government to bill you immediately -- and watch the people complain). And if you use extra Government services, pay for them as you use them.

The way we TREAT THE ENVIRONMENT. By now even George Bush realizes climate change is real. Strange temperatures. Killer storms. Drought. Floods. Firestorms. Ice storms. We're fouling our nest, folks, and we've got very little time left to fix it. We must challenge government to lead the fight to protect the planet or we'll all die. How's that for plain talk.

The way we PROTECT OURSELVES. The war on terror is a farce. There is no war on "terror". Terror doesn't exist. There are people - fanatics and fanatical organizations and sometimes fanatical countries who want to attack us. Let's identify them by name and organization and country and stop them dead in their tracks. And let's get rid of the TSA - do you really think you're safer on an airplane because of airport screening? And let's replace it with a system that really protects us.

The way we PROTECT LIFE. If you're Pro Life, you must be Pro Life after a fetus is born too. That means be willing to pay for that baby's medical care. Their education. Provide them a job. Provide for their retirement. And their end of life care. It doesn't stop at birth, Pro-Life people. It's a lifetime commitment.

The way we DELIVER HEALTH CARE. Why do the people who manage health care make a profit from doing so -- so they're motivated NOT to deliver the best health care but the worst? Why does the United States - one of the wealthiest countries in the world - have one of the worst health care systems in the world. Every citizen should have access to affordable health care and it should NOT be linked to employment, but to the fact that you exist. And the profit motive needs to be removed from managing health care. Health care providers should earn wages in line with their knowledge and experience. HMOs must be deleted.

The way we RELATE TO OTHER NATIONS. We've got to stop being a bully to other nations and start LEADING again. The real challenge to our interests in the 21st Century is not religious fundamentalism - it's the fast-rising economic power of China, India and Russia, and if you need proof of that, just look at the gas pump. We're going to be competing with China, India and Russia for scarce resources and for political power on the world stage -- and right now, we're not paying attention.

The way we ALLOCATE RESOURCES. Energy. Energy Energy. Without power, we're powerless. The real challenge of the 21st century and the battleground where all the wars will be fought.

The way we ALLOCATE WEALTH. It used to be the wealthiest people made 100 times what the poorest people made. Not anymore. Now they're making 10,000 times as much as the poorest. We need to DOUBLE THE MINIMUM WAGE. We need readjust the way wealth is allocated between households. You can live well on $1 million a year. Anything over that makes someone else poor and there's no excuse for that.

The way we PROTECT THE RIGHTS OF ALL CITIZENS. There's only one reason for Government: to protect the weak from the strong. And that means protecting everybody from anybody who's trying to deny them their equal rights. Anybody. Whether you like them or not. Everybody should enjoy the same rights and we have a Bill of Rights designed to protect us from the excesses of government and people who would deny us the equal protection of our laws. It's time to stand up for our Bill of Rights. And it's time to reboot what we stand for in the world.

Stay tuned.