How to Fight the Big Banks and Help the Social Security Administration All in One Swoop

Interesting--

Swoophttp://www.nationofchange.org/news/2016/04/15/fight-big-banks-help-social-security-administration-one-swoop/

First, let’s do a brief comparison. The Big Banks run the credit card industry. Credit cards charge anywhere from around 11.96% (for “low interest” cards) to upwards of 24.15% (for “bad credit” cards). On the other hand, the Social Security Administration has billions of dollars under its control – roughly $2.79 trillion – but only earned 3.6% on those funds.

Second, there’s a simple way for the SSA to earn more money. Americans overall carry $793.1 billion in credit card debt. Why not have the SSA issue its own credit card, at an interest rate 1 or 2% below the amount charged by the Big Banks? The low interest rate would either force the Big Banks to lower their rates or drive them out of the credit card business.

You might ask, “How could the SSA afford to issue credit cards at a much lower rate than the Big Banks? Mightn’t that put the SSA Trust Fund at some risk?” Not at all. In fact, the SSA is actually a secured creditor, if it lends money only to people who have a social security account with it. (Which is practically everyone). Congress could change the law and allow the SSA to set off debt owed to it against the retirement account which it owes to its credit card debtor. For instance, if a creditor card debtor owes the SSA $10,000 and the SSA owes the debtor retirement payments of $1,000 a month going forward, the SSA can set off enough future payments to recoup the debt. This is something that the Big Banks are not allowed to do. Congress could also change the bankruptcy laws to provide that money owed to the SSA is not dischargeable in bankruptcy, similar to the provisions which prevent taxes from being dischargeable.