The SC House of Representatives passed a Payday Lending Bill Wednesday that puts (some) regulations on the practice. “These loans are meant to be short-term financial solutions for unforeseen expenses; capping the loan amount and creating a statewide database to ensure that someone can only have one loan at a time will help prevent individuals from falling into a bottomless cycle of debt,” said Speaker of the House Bobby Harrell. We agree that the cycle of payday loans is vicious. At an interest rate that can climb in one year to 391 percent, consumers need a ready plan to dig out of this borrowing hole once they step into it. Fifteen dollars of interest for every $100 borrowed is a standard in the industry in South Carolina. We also agree that living paycheck-to-paycheck is not ideal, or even desirable. But what on earth do politicians think the equivalent is in the world of government spending?
If your doctor is grossly obese and smokes heavily, do you think you would feel entirely comfortable with his health recommendations? Given that, a government that spends every penny it can pull in, and then some, and then expects the public to trust in it to create sensible financial guidelines that will save poor planners from themselves...that’s a deluded group. Why, this bill doesn’t even include caps on the interest rates that can be charged or any guidelines about income benchmarks to be tied to loan amounts. A place to go to borrow money when you are in a bind is necessary for people, and so are the regulations to protect those same people.
How about the furloughs for state workers? You may have noted that the state senate aimed to save taxpayers some money at the beginning of this month by having only one full day of session last week. You could look at that as along the same lines as the mandatory furloughs for state workers that have been passed around to trim budgets. Except for the fact that the senators did not suffer a pay cut like the state workers they command. At most state agencies, there has been no reduction in hours or services, just staffing. For the S.C. Senate, the business was closed, halls darkened and doors shut, yet lawmakers still collect the same amount of pay.
Voters at all levels—state, national, local—have been putting out a desperate cry for the use of common sense and the establishment of priorities. Frustratingly, it seems far too often that cry falls on deaf ears.
This week, federal politicians have been wrangling over a second stimulus plan. The scariest bits of the wrangling seem to be this: no one is arguing against the need to goose the economy and all the parties agree quicker is better, yet the debate drags on; and the arguing is centered around what is a “fair” way to goose the economy, not what is most efficient. This lack of pragmatism spans both sides of the aisle. Two numbers to ponder: Total Iraq and Afghanistan supplemental war funding by the United States thus far, $872.6 billion; stimulus plan proposed in the U.S. Senate, $789 billion.
Both individually and collectively Americans are in it up to our ears, but instead of arguing about how deep we are willing to go, we need plans on how we will emerge. Turning off the lights and sitting on the money is no way to move forward.
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