I was having lunch the other day with a friend of mine at a small coffee shop near my bankruptcy law office in Bloomington, Indiana. Harry was stirred up by my blog about the government package of tax rebates designed to stimulate the economy and help people from being overwhelmed by debt. Harry knows that in the course of my work as a bankruptcy lawyer in Indiana, I deal with folks in financial distress day in and day out. Harry wanted to let me know in no uncertain terms what he thought about any plan to give money to people for the express purpose of having them go out and spend it, just in order to give a boost to our economy.

“Look”, said Harry, “people should be using that money to pay off all the debts they already have, not spend more!” He reminded me that the average American family already owes two months’ worth of income in credit card debt, and that interest payments alone are becoming a big expenditure for many families. The checks will be too small for anyone to stop foreclosure, one of the leading causes of bankruptcy in Indiana, he added.

Acknowledging the common sense in Harry’s words, I couldn’t help goad him a bit by asking what his economic stimulus plan would’ve looked like. Harry didn’t need to think long about that one: he’d make laws to reduce late fees and penalties being charged by credit card companies. Doing that, explained Harry, would go a lot further towards letting a guy catch up on his bills and stop falling behind in his finances than giving him a one-time rebate of $600. “What’s more,” he added with a triumphant grin, “my plan won’t cost the taxpayers a dime!” With that, Harry departed, leaving me to mull over his words – and to pay the lunch tab!