Sunday, March 16, 2008

Palm Sunday Pay Day

A friend of the Gazette who is an avowed atheist and thinks religion is an empty crock has been complaining about Pay Day lenders for a little over a year now. For the silk stocking readership of this blog that might not know what my friend is talking about, a Pay Day lender is a loan shark who specializes in short term, usually two week loans, to tie you over until next pay day. It’s a po’ folk thing.

Suppose a someone makes $100.00 every two weeks. Coming up short at the end of the first week he needs $50.00 to tie him over until next pay day. The smiling Pay Day lender lends him $50.00 for which he will charge him $25.00 in fees and interest. Pay day rolls around and our debtor with a new $100.00 bill in hand goes off to pay his loan ($50.00 + $25.00) and returns home with $25.00 which has to last two weeks. He might as well have gotten hooked on heroin.

While these figures are merely illustrative, a person on minimum wage working 160 hours a grosses $880.00 a month; so the illustration is not that far from reality. Interests and fees charged by Pay Lenders go as high as 800%. per annum [sic].

Is this legal, you might wonder? You bet! A free market is a free market. Reagan taught us all about the evils of Gov’mint meddling and onerous bureaucratic paperwork stifling the “entrepreneurial initiative.”

Well... wait a minute. Wasn’t usury illegal? Wasn’t there a legal cap of 7% interest on loans? Doesn’t the Bible say something about that?

Yes it does. The Old Testament prohibits interest and mandates the forgiveness of debt. Today, Palm Sunday, Jesus rode triumphantly into Jerusalem on an ass, drove the money changers from the outer temple and freed the sacrificial doves from their cages.

But in god-fearing, ever self-righteous, ever self-adulating United States we don’t really think about that, do we? In fact, how many Palm Sunday sermons actually mention Jesus’s act of Compassionate Vandalism?

In State legislatures and in the back-hallways around Congress there are murmurs to the effect that pay day lending is “hurting the economy”. Various compassionate politicians are talking about putting a 36% cap on pay lending. Can’t get more progressive than that, now can you?

Thirty six percent!!! Sho’ is a lot less than 800%. The “cure” being proposed by our humanitarians in the Congress is only 7 times more than the traditional rate of gouging.

Go out, wave your psalms, sing your hosannas, and crucify the widow and the poor man on a cross of interest.

© WCG, 2008

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