PrintOur national problem is economic illiteracy
There is so much economic illiteracy out there it's hard to believe. It starts with our government, but it doesn't stop there.
But here is one way it starts:
The public was told the lie that Obamacare, a 2,000 page bill with a huge number of mandates, and many new taxes, would substantially reduce health care premiums.
They took away annual and lifetime limits that essentially made it so small- and medium-sized health insurance companies couldn't afford the risk.
This reduced competition and the big companies had a captive audience because of the individual mandate to buy insurance with specific coverage.
And as the price of health insurance, and out-of-pocket expenses have skyrocketed in the thirteen years since Obamacare passed, the public is still intentionally lied to by the media and other Democrats that Democrats have made health care more affordable.
Heath care costs have risen an average of 6.5% for workers in just this year, according to the Wall Street Journal, which it calls the steepest rise in years, and for many workers, they have risen much, much higher. USAToday says the average spike is 7%, which is above the inflation rate. Cumulatively, Obamacare has doubled the cost of individual health insurance over the past decade, according to a study from the Heritage Foundation. Sally Pipes, writing at the Boston Herald, shows how Obamacare tax credits have spiked the cost of premiums.
It's not just health care.
Democrats like to pretend that daycare subsidies make daycare more affordable, but as with almost all government subsidies, they make prices soar, up 32% in the last four years.
The subsidies just change who pays for the day care for some people from the person to the taxpayer. People who pay the bill themselves get screwed.
The cost of child care has risen so high in recent years that some parents can't afford to work.
As of September, the average household spent more than $700 a month on child care, up 32% from 2019, according to a recent report from the Bank of America Institute. The sharply higher costs are driving some parents to leave the workforce in order to look after their children.
At the same time, many families laying out for child care are having to tap their savings while down on spending, potentially weighing on economic growth, BofA noted.
And we see the greedy hand of government in education, too.
As the government threw massive amounts of money at colleges, they jacked up the costs to make education more unaffordable. Now students and Democrats think other people should pay off the debt.
The government spent massive amounts of money because of COVID. Then the Democrats, after the economy was reopening and thriving, passed the American Rescue plan, throwing $1.9 trillion at the economy. That was like throwing gasoline on a fire.
The Federal Reserve kept interest rates artificially low which also contributed to inflation.
Then Biden compounded the inflation problem by setting out to destroy companies that produced reasonably priced energy and energy prices soared.
Somehow, the "experts" at the Federal Reserve and at the Treasury Department, along with people throughout the Biden administration looked at the rapidly rising inflation and didn't understand, or care, that the problem wasn't transitory.
The Democrats keep promoting electric cars with subsidies which increases the price of the cars. They essentially force the car companies to produce expensive electric cars that people don't want so they lose massive amounts of money on them. That causes them to jack up the price of gas powered vehicles to cover the electric car losses, which screws the poor and middle class.
So after all of this abject stupidity which is destroying the purchasing power of the people, it is no surprise that people have to stretch out their debt and somehow believe that they shouldn't be charged deferred interest if they don't pay their debt obligations on time.
Think of how many more people would mismanage their debt if they weren't incentivized to make periodic payments. They are only charged deferred interest on the unpaid balances throughout the period.
People must think banks and retailers get their money for free.
Look at this USAToday story here:
62% of Americans say deferred interest should be illegal
A majority of Americans, 62%, say deferred interest should be illegal, WalletHub reported last month in a Deferred Interest Study. The finding comes from a representative survey of about 250 Americans.
Deferred interest promotions abound during the holidays, a time when desperate consumers try to stretch their budgets beyond their available cash.
With deferred interest, the shopper generally puts a large purchase on a store credit card. The buyer may have six or 12 months to pay off the balance without owing any of the attendant interest.
But the interest accumulates, all the same. And if the buyer misses the payoff deadline, it all comes due.
The idea of paying interest on debt that you no longer owe is “completely counterintuitive, and completely opposite to anything that one would expect,” Papadimitriou said.
Imagine buying a new refrigerator for $1,800 using a deferred interest offer of no interest for 24 months, at an annual percentage rate of 25.99%. If you pay $75 a month for each of those 24 months, you should be able to repay the full balance and avoid the interest. Miss a payment or two, however, and you will face an extra $900 or so in interest charges when the 24 months are up.
It is sad that pollsters and the media think this is a worthy poll.
Why the heck would charging people interest on unpaid debt be illegal, especially since it is part of the agreement the people sign?
And of course the answer for people who don't pay on time would be to make it illegal. We are teaching generations that they aren't responsible for anything.
Maybe there should be a poll to see if it should be legal for the IRS to charge interest on late or underpayments.
After all, they have a zero cost of funds.
Image: Pixabay / Pixabay License
