Why Your Next Credit Card Could Be Backed by Obama

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Since apparently everything in America is going into the toilet except the public's faith in Barack Obama, it seems that the way to fix everything in America is to entrust it to Barack Obama. The issues on the table for greater government involvement include: student lending, the car companies, car warranties, pensions, health care, banks, etc -- the list goes on. I mean, really, what's the White House going to back next, your credit card? Maybe, says Slate's Chris Beam.



Beam explains that an Obama card wouldn't be so bizarre in the eyes of other countries. Germany, France, India and Iceland (yikes!) issue cards from state-owned banks. And there's an economic argument, too: If there are quasi-government programs to back house purchases, like Fannie Mae and Freddie Mac, why not have a quasi-government program back credit card debt, of which the average American holds $8700? Here's Beam:

Creating a government-sponsored lending agency--a Fannie Mae for credit cards--would rein the whole system in. For one thing, it would offer lower rates than the usual 18 percent. The government could charge, say, 8 percent interest and still turn a profit. It would include none of the usual hidden fees or surprise charges.

The catch, says Beam, is that you'd have to have amazing credit to get one of these cards. Well good, I say. After all, credit card companies notorioulsy make a killing by advertising to young people who foolishly fall for the mirage of credit and find themselves swimming in backpayments within years.

Another thing the government can do by backing your credit cards is direct part of your charges to programs of your choice. Here's Beam again:

Every time you buy something, a small percentage would go to wind-farm construction, say, or clean-coal research, or school computers. The government could also do something creative like dipping into the Social Security money pool. If it lent that money to creditworthy Americans, it could make a killing.

So that's the case for government-backed credit cards. It also seems like a PR nightmare for the White House. We can cue up the countdown to Glenn Beck musing something along the lines of: "Obama: He's everywhere you don't want him to be," or "There are some things in life you can't buy. For everything else, there's Obama." (Dibs on those, GB.)

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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