I have argued for weeks that one of the biggest problem with the economy is the credit card debt. People have run up the debt so high that they are now struggling to pay the bills. The Companies have raised the interest rates till you are not paying anything off just struggling to make the minimum payments.
My argument is, that if the Government passed quick massive reform on the Credit Cards, not allowing the Revolving Credit except to businesses, then use some of the Trillion Plus dollars and pay off this debt, you would immediately open up the credit lines and put tons of money back into the pockets of consumers to spend.
Americans hold just shy of $1 trillion in revolving debt on their credit cards now - MSNBC
We are talking about spending well more that with all of these stimulus packages that they keep coming up with. We spent $700 Billion + last time to bail out the banks. What if we spent that $700 Billion against this credit card debt? The banks would have gotten the same amount of money, and it would have immediately opened up credit at the consumer level. Also, at the same time, people would not have this massive debt on their shoulders with 20% interest rates and putting more money into their pockets. This money would have undoubtedly been infused into the economy in one way or the other. In essence, instead of spending $700 Billion on the economy, this money would have been much much much higher over the following months as the money being spent on these bills flowed into the economy at the mainstreet level instead of the top level. (That is what the Democrats said was the problem with Bush. He was trying to trickle money down. Now they are using the same philosophy.) Take the credit burden away from the consumer and you will see instant success.
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