I have no doubt the banking industry will fight like hell to keep things as they are and win. They did with the new bankruptcy laws, which places credit card debt on a par with child support. I got an offer of a credit card from an airline I like to fly, reputable, good folks. The top interest rate was 32.9%. I don't remember the conditions of that, glanced at it and threw it away.

The problem, I believe, is not the folks who owe $9,000. That's just an average. And a lot of people have no credit card debt. (PTL, I learned that lesson when I was much younger. I use them a lot, pay them off as I get the bills.) It's the extreme. One of the articles said that 1.3 million credit card holders declared bankruptcy one recent year.

As the folks with the higher debts feel more and more pressure, a lot of it from not being able to liquify the equity in a house, they will declare bankruptcy, slow down their consumption of higher-priced items, and the economy, dependent as it is on the extremes, will suffer.

By the way, I have a very good friend who has extremely complicated financial dealings and absolutely superb credit. With a net worth of about $6 million, the only times he's been late have been because of bank errors. He recently purchased and remodeled a house, added an ADU, and then refinanced it. He always adds a credit line as a "cushion". If he's travelling and doesn't make the payment it comes out of the credit line. He then pays that off.

He said that only two banks were willing to finance the deal for him. A year ago 20 would have. I'm not sure how much I believe the reported statistic that new home sales were rising. That may have been a burst of the last deals approved going through before the crunch, much like a light bulb burning out.

Arf