Brain Fertilizer

The most interesting aspect of this article is in the very first paragraph:

For eight years, Congress has attempted to enact comprehensive bankruptcy-reform legislation, but has been frustrated by extraneous issues and procedural difficulties. Last week, by a vote of 74-25, the United States Senate passed the legislation. It will now move to the House, where swift approval is expected (prior versions routinely garnered over 300 votes), and then to President George W. Bush, who has indicated that he will sign it.

What I find interesting is that the House of Representatives routinely gets strong, bi-partisan majorities to pass the bill, but it keeps getting hung up in the Senate. For eight years.

The purpose of the House of Representatives is to provide a form of representation that, in theory, is more responsive to the people. They have to be re-elected every two years, and the Representatives don't have near the stability and tenure of Senators. I can see how that might make them a less tempting target for lobbyists...after all, the guy you buy off might not be in Congress in less than two years; a Senator is a much better buy. Then again, I could see that the potentially brief career of a Representative might make them more susceptible to the wiles of lobbyists, as they attempt to cash in as much as possible before their tenure is possibly cut short at the next election. Thoughts?

But the point is that we've missed chances to improve a pretty lousy bankruptcy system for eight years because the Senate could not come up with Bill that a majority could agree on...before now.

For that reason alone I am leaning toward supporting it, since it would be short-sighted, if not downright stupid, to squander the best chance we have to make a substantial improvement to the bankruptcy system just because it doesn't address all the problems. If it can solve 2-3 of the 5 biggest problems, that's worth it to me. Let it run for a few years, and then pass another Bill into Law to tweak it and shore up a few other weaknesses, and we could have a vastly improved system 8 years from now, instead of continuing to limp along for an unknown number of years waiting for a better Bill. Apparently, Sen. Schumer is "an enemy of the good" just as much as "perfection" is!

In any case, Mr. Zywicki says:

The legislation addresses two problem areas of modern bankruptcy law: the consumer-bankruptcy crisis and the problem of small-business bankruptcies.

He concludes with:

I can’t see any reason why I or anyone else should have to pay higher interest rates or get worse service at the doctor’s office in order to preserve the “right” of some guy making $80,000 or $100,000 per year to walk away from debts that he could pay but does not want to. Yet that’s the way it is under current law. Those who are hurt the most are low-income and young borrowers who have the fewest credit options and can least afford to pay more for credit and goods because of the hidden “bankruptcy tax.” For all you critics out there — is there someplace where I can send you my part of the bill so that you can allow bankruptcy fraud and abuse to keep going unchecked?

The stuff in between is pretty good reading. I'm not sure I trust all his assertions, since he doesn't quote much or provide many links...but the assertions are compelling nonetheless. At the very least, it provides some issues to watch for in articles addressing the bankruptcy issue.