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In the past two years, consumer credit has declined, depending on whose numbers you use, over $2.5 trillion which represents approximately half of the consumer credit that credit card issuers made available just a few years ago. All issuers are approving fewer new accounts, offering smaller credit lines, and cancelling un-used accounts. Many are increasing interest and penalties on existing accounts.

The primary result is an obvious one. Many consumers and taxpayers will have absolutely nothing to "fall back on" for even a small emergency need. As soon as credit card payments are a few days late (no matter what the reason), that card holder is "financially strangled" with no way out.

The result is that tens of thousands of new bankruptcy filings are expected throughout 2009 and even more in 2010.

Mathematically, the federal government could allocate almost $10,000 in cash to every single family in the United States (there are approximately 115 million families) for a total cost of one trillion dollars.

Maybe that would be a better use of the so-called "bailout" funds.

- Ed Smith, Publisher
The EHS Letter Manual