IfLizWereQueen Cross Post

Charles Ponzi has a lot in common with Wall Street Banks of today–like Ponzi, they are in the business of fleecing Americans.

Yes, their games are different, but the end result to the victims is the same:  They are robbed.

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I was visiting a friend who has just taken over the responsibility of assisting her elderly mother in managing her money on a monthly basis.  No, this woman does not have stocks and bonds to manage, only social security of $1,200 along with about $1,000 more a month from rental income.

Her mother has a credit card account with Bank of America, but this could have been any Wall Street bank and the story would have been the same. In case you don’t know, on the second page of the monthly statements (because banks don’t want you to read the information)is a little block labeled “Payment Information”.  If you have credit card debt, you should read your monthly statement sometime.

This woman’s mom owed a balance total of $6,554.14

According to the payment information on her statement, if her mom only makes the minimum payment of $206.00 a month, it will take her 27 years to pay off the balance of $6,554.14. She will likely die first.

If she does live to pay off her debt, the woman will end up paying Bank of America $20,614.20–almost three times the value of the loan in the first place.  Bank of America will make at least $14, 060.00 –yes there will be nominal costs for the bank on maintaining the account, but it is highly doubtful that these costs exceed more than a thousand dollars over the life of the loan.  Additionally the interest is not the only money that the bank may collect on this debt. If the women is one day late on paying the debt then she is assessed a “late fee” of $35 and the APRs may be increased up to the Penalty APR of 29.99%.

Each month, on her $265.85 $206.00 payment, the woman pays $142.73 in interest–more than half her monthly payment.

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Why is this outrageous system allowed to exist in a Democracy?  Because we allow it with our votes for federal officials.

Democracy should not mean giving license to people to rip other people off and then calling their marks stupid for falling for the scheme.  (Unless of course the marks are rich as most of Madoff’s victims were which explains why he is in jail and people like Lloyd Bankfein are not.)  Is there any reader out there who actually believes that the usurious interest rates in effect on credit card debt that enable banks to collect more than three times the value of the original loan are moral and just?  Should we have laws on the books that allow banks to charge interest to customers that amount to three times the value of the original loan?

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So why is it legal for Wall Street Banks to rip off Americans with impunity and people like Charles Ponzi and Bernie Madoff go to prison for ripping people off?

It is legal for banks because the people that we currently have “representing” us in the U.S. Congress allow it.  They are the ones who write the laws.  They could write a one page law this morning to end this all if they wanted to represent the majority.  They actually could and in less than an hour and in less than a full page.  The law would simply state that it is not legal to collect more interest than the total worth of the original loan.

Yes, it is that simple.  There is nothing complicated about putting a ceiling on the amount of interest that a financial institution is allowed to charge.  No brain surgeon skills required. It could be done quite easily.

Well why don’t they pass such a law?

They don’t pass such a law because the majority of shysters that we currently have in Congress (Democrats and Republican/Tea party jerks) own Wall Street stock in these financial institutions and they personally profit from the misfortune of Americans like my friend’s mother.  Yes, it is exactly as simple as that.  No brain surgeon skills required.  In addition to owning stock in these financial institutions, their political campaigns are funded by these banks and financial institutions.  A report from 2008 stated that since 2001,  eight of the most troubled firms had donated  more than $64.2 million to congressional candidates, presidential candidates and the Republican and Democratic parties.

Nearly every member of the House Financial Services Committee, who in February 2009 oversaw hearings on how the $700 billion of TARP bailout was being spent, received contributions associated with these financial institutions during the 2008 election cycle and most of them owned Wall Street stock in at least one of these financial institutions and many of them owned stock in several of these financial institutions.  Go read the facts on your elected officials in Open Secrets.

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What can we do about it? Plenty!

We can throw the entire House of Representatives out of Washington DC in 2012 along with the White House and we can elect a President who is neither a Democrat nor a Republican/Tea Party jerk. We can elect non-wall street investors from the 99% to represent us.

Or we can continue to pretend that we have a “two-party” system and that we are “throwing our votes away” if we don’t vote for a Democrat or a Republican.  Or we can continue to pretend that we are helpless and that the 1%’s money is worth more than our collective majority vote.

The truth is that we ARE throwing our votes away if we vote for either a Democrat OR a Republican.