John Q Public

This is a story about John Q. Public. 

John grew up and graduated in the mid-1960s. He did a stint in college, then went off to Vietnam in service to his country. He returned home, found a 40-hour job with benefits, and something called a defined pension.

In the 1970s, John got married and his wife stayed home to raise their children. They saved their money and managed a 30-percent down payment on a house, something required then on a 15-year loan.

In the mid-70s there was talk of a global market and trade agreements taking place. Most economists, worth their salt, agreed America’s standard of living would go down as others started to rise. Eventually they would meet somewhere in the middle.

To counter middle class America from noticing its standard of living going down, Congress looked for ways to retain middle class spending income. It loosened credit, and so the words “deregulation of the financial institutions” was seen as that magic solution.

The 1980s introduced John to a portfolio of credit cards. The slogan of the middle class became “charge it” and so they did. They had access to loan spending power rather than earned income. But things that are “too good to be true” never seem to last as the Fed Chairman warned Americans their credit debt was at all-time highs while savings were at low levels.

Savings & Loan financial institutions were the first to start to crash, and something called junk bonds followed, leading to a bailout of financial institutions. John Q. began hearing Congress talk about tax cuts for the middle class and business to stimulate the economy. It all sounded good as the middle class was strapped with credit-card debt. The answer — called the “tax reform act” — came in late 1980s.

But wait, something was wrong.

The “tax reform act” took away credit-card and auto-loan interest deductions from your income tax. With the lack of savings — but a whole lot of credit-card debt — the middle class took another hit.

John Q. survived the ’80s and talk began of a trade agreement called NAFTA. It was going to create new high-paying jobs. It passed with the support of both Republicans and Democrats.

The 1990s arrived and politicians began worrying about middle-class erosion. The fix: loosen credit. Allow people to buy a home with no money down on 40-year loan. Buy now! Twelve months to pay! Ninety days same as cash! Payday loan centers. And vehicle loans for six years.

But history has a way of repeating itself.

Middle class America started to feel the pains of debt as jobs and the economy slowed down. And so passes the Bankruptcy Abuse and Consumer Protection Act. But again, it becomes harder for consumers, not business, to discharge debt. The end result: another bailout of financial institutions.