Horace Cooper

For some Americans credit cards are a remarkably useful financial tool which improves their lives and those of their families. For others they are the equivalent of handing a bottle of bourbon to an alcoholic.

Whether the law makes one assumption over the other is the difference between control and liberty. Particularly during an economic downturn, all Americans should be sensitive to the temptation to trade liberty for control. Why? Because during economic hardships those who prey upon our fears find it is easier to persuade us to accept greater government control over our lives in exchange for the security they offer.

In an ideal world credit card companies would loan money for nearly no interest and allow an unlimited time to pay it back. Of course in that ideal world the card would be issued by “Grandma Express.” Curiously, in the real world credit card issuers are depicted as mafia dons looking for any and all excuses to break our legs and arms if and when we violate our credit card agreements. The truth is that credit cards issuers are neither doting grandparents nor crime bosses. They are businesses run for a profit.

But in the wake of President Obama’s recent meeting with the major credit card executives it appears that he and Democrats in Congress see now as the time to strike against the credit card industry while the iron is hot; and it’s up to us to decide if the loss of our liberty in the process is a fair trade.

Consider: during an economic downturn even otherwise responsible credit card users may choose to supplement their household needs with greater card use. While taking on more debt seems counter-productive during a downturn, for these people this choice is a rational and superior way to bridge a temporary job loss or income reduction when juxtaposed against selling their house or forcing their children to quit college. But if the credit card rules being considered in Washington go into effect this choice could be taken away.

Horace Cooper

Horace Cooper is a legal commentator and a Senior Fellow with the Institute for Liberty.