Too many Americans don't understand money or postponed gratification.
And too many of those wind up in bankruptcy court, where, unfortunately, a fresh start is frequently not enough to straighten them out financially. So they fall again, victims of their own lack of discipline and the purveyors of easy credit.
Some are in court two and three times at six-year intervals to erase their debts. That's an awful lot of broken promises and frayed trust.
Bankruptcy statistics for 2002 reveal the highest number of filers ever, 1.54 million. All told, what they owe is equivalent to a hidden tax of $400 on each of us.
In the last Congress an effort was made to make bankruptcy relief harder to come by. It would have required credit counseling and a needs test. It would allow no repeat filings for eight years instead of six. And it would require a financial management course before debts could be erased.
It failed because of a provision to bar abortion-clinic protesters from using federal bankruptcy laws to welsh on their court fines and fees. This year's bill lacks such a section. It passed the House but without it Senate Democrats are unlikely to go along.
More promising is a program designed by the Coalition for Consumer Bankruptcy Debtor Education based in New York. It teaches a free, three-hour class to bankrupt consumers on money management. Topics include how to budget, identify predatory lenders, read the fine print in credit offers, and discipline one's self to avoid debt.
Class members develop spending plans and learn what credit cards cost. They also find out about credit reports, consumer scams, including “rent to own,” the difference between variable, fixed, and periodic expenses, plus how to track their spending and boost their savings.
For the most part, people don't want the stress of more debt than they can manage. Some come by it through no fault of their own when jobs lost or dire illness flattens family coffers. Others walk blindly and with gusto into it. They need the fiscal education.
The New York education program, which would dovetail nicely with the new legislative proposal, should not have to wait for the bill to pass before it is made available to would-be bankrupts.