Humbug Square - Deadbeat Nation

Marjorie Girth pays cash for her meals at the Georgia State University cafeteria. As she stands in line at the register, however, Girth watches students whip out their credit cards.

A $6 lunch? Plastic. Coke and a cookie? Plastic. Bagel and coffee? Plastic.

The students see a free lunch. Girth sees them paying 21 percent interest on a doughnut. She's conscious of such things because she and other bankruptcy and commercial law professors tried to stop the credit industry's mean-spirited bankruptcy bill from becoming law.

"We have a society that is very poorly educated about the cost of consumer credit," says Girth, former dean of GSU's law school and now a professor of bankruptcy law. She and more than 100 other professors signed a letter warning Congress that the new bill will hurt a lot of Americans.

"The bill is deeply flawed and will harm small businesses, the elderly, and families with children," the letter states.

The bill passed, of course, with votes from almost all Republicans and some Democrats.

You kind of expect Republicans to carry water for the credit industry while they douse the middle class. But congressmen Sanford Bishop and David Scott should really be ashamed. When the two Georgia Democrats - both of whom are commonly described as "black moderates" - voted for the aptly nicknamed "Debt Slavery Act," they betrayed the hard-working constituents in their slightly poorer than middle-class districts.

The new law, signed by President Bush on April 20, represents a wholesale change in America's attitude toward families that get into financial trouble through no fault of their own. From the 1920s until today, people were allowed to discharge their unsecured debt if they were "honest but unfortunate."

Now, it will be much more difficult for the little guy to get a fresh start with his bills. Among other features, the law creates a new paperwork burden, which means lawyers will charge higher fees, which means more people will represent themselves and lose. People who get sick or lose their jobs or have relatives in vegetative states might not be able to get out from under a massive burden of debt.

Girth notes that the new law makes it sound "as if all individuals filing under bankruptcy law are presumptively abusers." Between 3 percent and 10 percent of bankruptcy filers are believed to be abusing the system. Most people who seek bankruptcy have lost their jobs, been divorced or been overwhelmed with medical bills.

The bankruptcy rate has doubled over the last decade, with about 1.6 million households filing last year. Georgia has one of the highest rates in the nation. But it's not because there are more deadbeats. It's because banks and creditors have pushed harder and harder to convince people to borrow.

Just read the come-ons that arrive in your mailbox each day from Citibank, Chase and Bank of America. "0.0% interest!" "Free balance transfers!" "The card that saves you money!" When students buy books at Georgia State, the clerks put the books in bags that are stuffed with credit card applications.

But the credit card companies - part of an industry that made a $30 billion profit last year - didn't want to accept the risk of extending credit to the very people they're soliciting. It was much cheaper to buy off Congress.

Is this a great country or what?

Any idiot can get into trouble with credit cards. I ought to know. When I was married, my wife and I ended up at the Marietta office of the Consumer Credit Counseling Service. The counselor looked at our credit card debt and the fact that I was working two jobs and told my wife: "Mrs. Monroe, I suggest you get a job." She cried tears the size of coins. I continued abusing credit cards after my divorce. It got even worse when I stared dating again. A wild and crazy guy needs his plastic. A few years ago, in a moment of reckoning, I broke out a calculator and added up the balances.

Total: $34,000.

In the year 2000, I realized that I was still paying for Bloody Marys I drank at a Hawaiian restaurant in Nashville in 1974.

I could have declared bankruptcy. But I didn't. Instead, I got the book How to Get out of Debt, Stay out of Debt and Live Prosperously by Jerrold Mundis, who advises readers not to declare bankruptcy but to hunker down and pay off their debts because, well, it's the right thing to do. Mundis urges you to abstain from going into debt one day at a time. Before you can get out of debt, you have to stop getting into more debt.

Duh.

I followed Mundis' advice, step by step. It hurt terribly, especially the part where you cut up your credit cards. A couple of years later, I had paid off every dime.

Mundis based his book on the principles of Debtors Anonymous, a group that copies Alcoholics Anonymous because the use of debt can become an addiction, like booze, crack, meth, gambling or red velvet cake.

Addiction experts now understand that addictions come in clusters. Someone like me can put down the whiskey in 1982, but still stumble along using debt or food addictively. Even if you beat one addiction, you might succumb to another.

Which brings us to our addict-in-chief, President George W. Bush. As we all know, Bush stopped being a sloppy drunk with divine intervention from the Rev. Billy Graham. But that doesn't mean he doesn't have other addictions. Like debt.

The problem is that when the president is an addict of any kind, we all suffer. Look at Clinton and sex.

Do the math. When Bush came into office, the national debt was $5.6 trillion. Today it's up nearly 40 percent, to more than $7.7 trillion, and rising.

The cheerleaders in the media have been fantasizing about "economic recovery." But we're not recovering from anything as long as our debt is going up like a rocket. We're still "using," as addicts say.

The weird thing is that our addict-in-chief is like the drunk who hopes to hide the liquor on his breath by loudly declaring that some fellow drunk in the corner should be arrested. He's abusing debt on a grand scale, while punishing regular guys who've lost their jobs.

The bankruptcy bill is the perfect storm: a breathtakingly greedy attack against the American middle class at the very time that middle-class Americans are becoming more vulnerable than ever.

The economy is crippled by debt. The stock market is teetering. Higher gas prices and inflation are forcing consumers and businesses to spend less on other things. Incomes are stagnant. Medical costs are soaring and insurance coverage dwindling. And the housing bubble looks like a pinata just before the first kid gets the stick.

Yet the credit-industry predators are able to blame all the problems on consumers. The law takes no action against the companies and banks that entice gullible people into using the fantastic plastic, or against mortgage companies that offer mysterious new loans with interest rates poised to explode upward.

Of course, the federal debt isn't held by credit-card companies. It's held largely by China and Japan. If our economy goes bust, we'd better hope that our creditors across the Pacific are a hell of a lot nicer than banks in New York.

Senior Editor Doug Monroe considers himself a true fiscal conservative, no matter what you may think. You can reach him at doug.monroe@creativeloafing.com.??