Monday, September 27, 2010

Debt Collectors Are Precious

 
As a bankruptcy attorney, I hear these kinds of stories often.  I wish more Americans knew about how credit card companies and banks really operate.  If everyone would read The Two Income Trap by Elizabeth Warren, we would have different laws pretty quickly.
 

Wednesday, September 22, 2010

A Tax on Debt?

Should Government Tax Debt?

Certain economists, most notably Harvard professor Gregory Mankiw, have long advocated so-called Pigovian taxes aimed at discouraging pollution and other socially costly activities. Now two academics are suggesting such a tax might be applied to a dangerous behavior that has become popular in the U.S.: Taking on too much debt.

... We could all be better off if, during booms, the government placed a tax of 0.56% on the borrowings of small and medium-sized businesses, and 0.48% on the borrowings of U.S. households. The tax would fall to zero in busts.

... a tax on debt wouldn’t be unprecedented. Chile, for example, has long levied a tax on short-term foreign loans as part of a broader effort to limit speculative capital flows. The jury is still out, but  some economists believe the measures have helped protect Chile from the kind of foreign-investor panics that tend to hit emerging economies.

See the entire article here:

http://blogs.wsj.com/economics/2010/09/22/should-government-tax-debt/