February 16, 2005

Todd Zywicki has an even more systematic refutation of the oft-cited statistic from a Harvard study that half of bankruptcies are caused by illness or medical bills in his continuing series on bankruptcy reform. Dr. Rangel is also on the case. Earlier entry: Feb. 14.

Zywicki also persuasively demonstrates that credit cards have not worsened household financial conditions; rather credit cards are substituting for more expensive and less-attractive forms of debt and credit such as pawn shops and retail store credit. Too, Zywicki notes, people going into bankruptcy have an incentive to use the dischargeable debts of credit cards to pay non-dischargeable or secured debts.