Jeff Goldsmith on What's In Your Wallet?

It certainly isn’t cash!  The Wall Street Journal reported this morning that credit card companies mailed out almost 85 million NEW credit cards in the first six months of 2010, double what they sent last year!  Just what we need, more credit cards! 

http://online.wsj.com/article/SB10001424052748704746804575367172177309754.html?mod=WSJ_business_whatsNewsthat

Capital One, of the famous barbarian TV ads, sent one of them  to a bankrupt, 66 year old retired phone company employee who’s $33 thousand in debt and was SUED by Capital One in 2006, with a letter that read “At some point we lost you as a customer and we’d like to have you back”.  The same article reports that Fannie Mae has begun trying to juice up home purchases by offering marginal borrowers a $1000 downpayment.  Fannie Mae was, of course, the guarantor and facilitator of billions in subprime loans, which brought down the economy. 

In another Wall Street Journal piece, David Wessel argued that the reason why we’re not recovering from the recession is that we are literally choking on debt- 354% of GDP at the peak in 2009. The only way to recovery is to deleverage and begin devoting our free cash flow to actually buying things again, hopefully not with credit cards.   What is it going to take to actually sober us up?