“Debt Slavery” :

The U.S. senate has passed a dream bill for credit card and financial service companies that, if passed by the House, will land millions of American families in debt slavery. Rather than being able to file for Chapter 7 bankruptcy and make a difficult new start, families and individuals will be placed on long-term payment plans to credit card companies, companies that will take their houses, their cars, their child-support payments, and their paychecks.

If you think you’re unlikely to land yourself a share-cropping position in this new feudal system, ask yourself if you can be sure that no one in your family will get sick, be injured, die, lose a job, or get divorced. More than one in every 100 adults in America files for bankruptcy each year. If you’re a child, the chances of your family filing for bankruptcy are about twice that. (Kids cost money.) These rates have doubled in the past decade. The basic reason that bankruptcies have increased is that personal debt has increased. In fact, in proportion to debt, bankruptcies are actually down.
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Corporations have a very easy time filing bankruptcy. CEOs are able to squirrel away fortunes while canceling employees’ pensions. Millionaires can file for bankruptcy and keep unlimited amounts of money out of reach in “asset protection trusts” as well as in super-expensive houses. The press secretary for the bill’s primary sponsor, Senator Charles Grassley, told the New York Times that “the senator’s staff was unaware of the trusts and the loophole for the wealthy that they represented.” Uh-huh.

These loopholes need not be exploited offshore, as in the olden days. There are a number of states that allow them, regardless of whether the robber baron lives in the state. But the legal costs of setting up “asset protection trusts” place them beyond the reach of most people. Oh, and corporations are allowed to shop for friendly judges from state to state, a right that Congress recently took away from the victims of corporate practices who try to file class action suits. The current bankruptcy bill leaves these millionaires’ loopholes in place, although it requires that pirates of industry have purchased their mansions three and a third years prior to bankruptcy if they intend to keep them through the homestead exemption.

Real Slavery :

Don’t get me wrong. The bankruptcy bill is a truly awful piece of legislation¹, but it doesn’t quite compare to the evils of slavery. Besides, for those quick to resort to slavery comparisons, it should probably be pointed out that there are real debt slaves living all over the world who would gladly change places with some American who’s getting screwed over by the Congress and credit card companies.

^{1: Seriously, the bankruptcy bill is horrible. Though I concentrated on the hyperbolic title, the article I linked to above is a pretty good primer on what’s wrong with this bill. Also, if you have any doubt about where our representatives loyalties lie, check out this list of amendments to the bill that were defeated.}