A NEW AMERICAN TALE – “ALICE IN OBAMA-LAND”
by Joseph J Kusnell
Once upon a time, there was a land of make believe called “Obama-land”. In Obama-land up was down and down was up and nothing existed unless it existed left of center.
One day there developed in the land of “Obama-land”, a practice known as “Enjoy Today and Pay Tomorrow” the accepted vehicle for which was the credit card. For people that had no job or could not pay their bills, the credit card was like a ticket to Candyland. And so, many of the residents of “Obama-Land” became enamored of the practice and began to “Enjoy Today and Pay Tomorrow”.
But over time, something happened. This practice of living on borrowed money became malevolent and soon, many “Abama-Land Residents” found themselves in dire financial straits with still no money but big credit card balances at high interest rates. And slowly and inexorably they began to fall behind.
Enter the Master of Obama-Land, Barako-Obama. Master Obama determined that what had to be done was that the purveyors of the credit cards had to be prevented from charging so much interest to those who already had balances which they could not pay. Charging these people higher interest rates, said Master Obama, when they had no money was cruel and inhuman since the people living off their credit cards couldn’t pay them back so how in the world could they pay higher interest rates too? And so, the Master decreed that these higher interest rates would be lowered to a more reasonable rate, say that of people who did make their payments on time.
This new law led to consternation on the part of the credit card industry because the very people who were running the biggest unpaid balances and getting the furthest behind were now protected from being charged high-risk interest rates. This put the credit card companies in the trying circumstance of have to accept less interest revenue from the very people that were their biggest risks. It was an unsustainable method of running a financial loan business.
This could only lead to the credit card companies eventually defaulting themselves. After all, how could you not charge the highest interest to the people carrying the highest unpaid balances over the longest time? That seemed obvious.
And then someone suggested an answer. Find the persons with low balances, people who pay on time every month, people who are no problem, and raise the interest rates on them to pay for the loss of interest on those who are always behind.
And what the Master was asked, if those people are not running big enough balances month to month from which interest can be earned sufficient enough to offset what is being lost on the delinquent accounts? And the Master smiled knowingly and said, “then charge them a fee for using your credit cards.”
“Can we also charge a fee to those who are delinquent?”
“No, they have enough to deal with.”
The owners of the credit card companies looked at one another. “You mean,” they said to the Master, “we lowered the interest rates on the people who run delinquent high balances and then to recoup our losses, we must raise the interest rates – and charge fees – on those that do not?”
“Exactly. After all, which money is more likely to be paid?”
“The fees from those who pay their bills on time, certainly.”
“Exactly. And which are less likely to be paid?”
“The fees, interest and balances from those who do not pay their bills on time.”
“So there you go. Raise the fees on those that pay and pay on time to cover the losses from the new lower interest rates on the delinquent accounts.”
“I find that a most amazing concept.”
“Exactly but what do you expect from “Alice In Obama-Land”.
Have a nice day.
Joey
Where people come to exercise their minds:
Articles in Joey’s Talk and Controversy are the express opinions of Joey and not Boomeryearbook. However, while non-members can read articles on boomeryearbook.com only members can make comments. Joey’s section is called Joey’s Talk and Controversy for a good reason. In Joey’s words, “I hope I’ve given you food for thought and you will join boomeryearbook and respond”.
www.boomeryearbook.com is a social networking site connecting the Baby Boomer generation. Share your thoughts, rediscover old friends, or expand your mind with brain games provided by clinical psychologist Dr. Karen Turner. Join today to discover the many ways we are helping Boomers connect for fun and profit.
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on Saturday, May 23rd, 2009 at 12:04 am and is filed under Joey's Comments and Controversy.
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A NEW AMERICAN TALE – “ALICE IN OBAMA-LAND”
A NEW AMERICAN TALE – “ALICE IN OBAMA-LAND”
by Joseph J Kusnell
Once upon a time, there was a land of make believe called “Obama-land”. In Obama-land up was down and down was up and nothing existed unless it existed left of center.
One day there developed in the land of “Obama-land”, a practice known as “Enjoy Today and Pay Tomorrow” the accepted vehicle for which was the credit card. For people that had no job or could not pay their bills, the credit card was like a ticket to Candyland. And so, many of the residents of “Obama-Land” became enamored of the practice and began to “Enjoy Today and Pay Tomorrow”.
But over time, something happened. This practice of living on borrowed money became malevolent and soon, many “Abama-Land Residents” found themselves in dire financial straits with still no money but big credit card balances at high interest rates. And slowly and inexorably they began to fall behind.
Enter the Master of Obama-Land, Barako-Obama. Master Obama determined that what had to be done was that the purveyors of the credit cards had to be prevented from charging so much interest to those who already had balances which they could not pay. Charging these people higher interest rates, said Master Obama, when they had no money was cruel and inhuman since the people living off their credit cards couldn’t pay them back so how in the world could they pay higher interest rates too? And so, the Master decreed that these higher interest rates would be lowered to a more reasonable rate, say that of people who did make their payments on time.
This new law led to consternation on the part of the credit card industry because the very people who were running the biggest unpaid balances and getting the furthest behind were now protected from being charged high-risk interest rates. This put the credit card companies in the trying circumstance of have to accept less interest revenue from the very people that were their biggest risks. It was an unsustainable method of running a financial loan business.
This could only lead to the credit card companies eventually defaulting themselves. After all, how could you not charge the highest interest to the people carrying the highest unpaid balances over the longest time? That seemed obvious.
And then someone suggested an answer. Find the persons with low balances, people who pay on time every month, people who are no problem, and raise the interest rates on them to pay for the loss of interest on those who are always behind.
And what the Master was asked, if those people are not running big enough balances month to month from which interest can be earned sufficient enough to offset what is being lost on the delinquent accounts? And the Master smiled knowingly and said, “then charge them a fee for using your credit cards.”
“Can we also charge a fee to those who are delinquent?”
“No, they have enough to deal with.”
The owners of the credit card companies looked at one another. “You mean,” they said to the Master, “we lowered the interest rates on the people who run delinquent high balances and then to recoup our losses, we must raise the interest rates – and charge fees – on those that do not?”
“Exactly. After all, which money is more likely to be paid?”
“The fees from those who pay their bills on time, certainly.”
“Exactly. And which are less likely to be paid?”
“The fees, interest and balances from those who do not pay their bills on time.”
“So there you go. Raise the fees on those that pay and pay on time to cover the losses from the new lower interest rates on the delinquent accounts.”
“I find that a most amazing concept.”
“Exactly but what do you expect from “Alice In Obama-Land”.
Have a nice day.
Joey
Where people come to exercise their minds:
Articles in Joey’s Talk and Controversy are the express opinions of Joey and not Boomeryearbook. However, while non-members can read articles on boomeryearbook.com only members can make comments. Joey’s section is called Joey’s Talk and Controversy for a good reason. In Joey’s words, “I hope I’ve given you food for thought and you will join boomeryearbook and respond”.
www.boomeryearbook.com is a social networking site connecting the Baby Boomer generation. Share your thoughts, rediscover old friends, or expand your mind with brain games provided by clinical psychologist Dr. Karen Turner. Join today to discover the many ways we are helping Boomers connect for fun and profit.
This entry was posted on Saturday, May 23rd, 2009 at 12:04 am and is filed under Joey's Comments and Controversy. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.