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Credit-Card Firms to Borrowers: Let's Make a Deal


Banks offer to wipe out balances, forgive debt.

From Ohio to California, Detroit to Florida, borrowers are beginning to feel like nonpayment of debt -- be it credit cards or mortgages -- is the only moral, respectable way to fight the financial machine. Indeed, even the small Andean nation of Ecuador recently thumbed its nose at creditors, calling a portion of its debt "illegal.

In the same way that American banks faced with non-payment of mortgage and credit card loans have done, Ecuador's lenders bit the bullet and allowed that country to buy back its own delinquent debt at pennies on the dollar.

The federal government is pumping trillions of dollars into the American financial system, hoping banks will funnel the money back into the economy through new loans. Consumers, however, aren't biting.

Perhaps it's a simple matter of economics that we no longer have the income to cover our ballooning debt service. But perhaps the tide has turned. Perhaps the winds of social change are now blowing in a healthier, more sustainable direction, one where we can live free of the shackles of debt dependency.

Hey, a guy can hope, right?
No positions in stocks mentioned.

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