The Lady Speaks

The economy’s just perking along, right?

Last year set a new record for personal bankruptcy filings. And yes, the reason for that was the number of people rushing to file before the new law went into effect on Oct 17, 2005.

From CNNMoney.com:

The number of Americans filing for bankruptcy jumped 30 percent last year to the highest on record as debtors rushed to file petitions before new restrictions took effect, according to the Administrative Office of the U.S. Courts.

Personal bankruptcies filed in the federal courts totaled 2,078,415 in 2005, up from 1,597,462 petitions filed in 2004, the office said in a statement on its Web site Friday.

It was the largest number of bankruptcy petitions ever filed in any 12-month period in the history of the federal courts, according to the office, which collects information for the federal judiciary.

Bankruptcy filings for the period between Oct. 1 and Dec. 31, 2005, also hit a record high for any quarter, the office said.

The increase was largely in response to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which went into effect on Oct. 17, 2005.

Under the new law, it became harder for individuals to file for bankruptcy under Chapter 7, which would let them clear their debts and get what’s known as a “fresh start.”

A ‘spending economy’ is not a good economy. For one, it encourages people to run up a lot of debt, and second, a country needs to be manufacturing goods and encouraging its consumers to buy those home-grown items in order to grow.

Remember the ‘Buy American‘ campaign from years ago? There was a reason – buying from American manufacturers encouraged them to continue making things.

Since they needed workers in America to make those things, buying American helped other Americans keep their jobs.

And, as more Americans started working, they also started buying, thus companies had to increase their workforces to keep up with demand. Nowadays, we’ve got the reverse going on.

And, the biggest obstacle to buying American? The prices. Prices on American-made goods are higher for several reasons.

1. Union wages – China sends us lots of cheap shit because their workers are getting paid jack. Of course, what’s jack to us allows them to buy phones, computers, cars, etc. – it’s creating a middle-class in China while the middle-class in America is going under.

2. CEO salaries – what the hell is some guy doing making tens of millions (or more!) when his company, the one he’s in charge of, is going under?

3. Shoppers – Americans are cheapskates. No doubt about it. Some of us are forced by necessity to find the cheapest price out there because we don’t earn enough to take us above poverty level. Others just like the bragging rights of finding the lowest price.

Remember when Wal*mart used to have ‘Made in America’ signs hanging all over their stores? Do they have even one product in their stores these days that is made in the US? They sell, to quote a few folks I know, ‘cheap, Chinese shit.’

And while shoppers lap it up, they’re also moaning and whining about all the American companies that are outsourcing, laying off workers, or just closing up shop. I mean, we’ll buy the Wal*mart brand, Chinese-made, trash bags, and then turn around and complain if Hefty ™ goes out of business – or moves its production facilities to Bangladesh or China.

By the way, while Wal*mart is busy selling us cheap, Chinese shit, their average worker is making somewhere around $9.68 an hour, and the CEO is making 871 times what their average worker does. (2004 statistic, source: Institute for Policy Studies)

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March 25, 2006 - Posted by | Economy, Employment, Government

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