Featured Article
Conservatives in the Payday Lending Debate
By Marc Kilmer
What
would happen if a member of the General Assembly ever proposed a bill
banning consumers from carrying balances on their credit cards? You
would expect the legislature's conservative members (and
probably most liberals) would rise up against this intrusion into
personal finances. While recognizing that this practice may have
financial risks, conservatives would rightly point out that government
should not be involved in such decisions. And, people need freedom to
decide how they spend their money. When it comes to payday loans,
however, such thinking is increasingly absent among conservatives.
Help Economy by Cutting Taxes
According to the Columbus Dispatch, "the Ohio economy continues to languish compared with other states' when it comes to jobs, population growth, income and many other key economic indicators, a Dispatch analysis shows."
In
Thoughts on Ohio's Climb
to the Top, Buckeye Institute President David Hansen writes, "Jobs continue to
leave the state yet the size and cost of government continues to grow.
Ohio can compete for new jobs and higher incomes only if lawmakers
follow the positive examples set by Florida, Tennessee, and Texas and
eliminate state and local income taxes. Citizens in these states enjoy
a higher level of economic prosperity and freedom than do Ohioans.
State and local income tax elimination would take Ohio’s tax
burden down from 12.4 percent to 9.3 percent and tie Texas for the
eighth lowest tax burden in the nation. The move would give our
state’s economy a much needed boost."
Charter Schools Popular with Parents
"After a rocky start, charter schools -- independent, tuition-free schools that are publicly funded but privately operated -- are taking root in Ohio neighborhoods. Though some charters have been plagued by dismal test scores and fiscal chaos, the best have emerged as anchors in communities where parents had once given up on public schools," reports the Cleveland Plain Dealer.
Former state Representative Sally Perz writes in Why we Creaed Charter Schools in Ohio, "The fast growth of the charter school movement is propelled by parents - the very people paying the taxes for the schools and electing members to the legislature, paying for the very rooms and buildings which house their deliberations. When legislators try to cap the growth of charter schools they are saying to parents, you don’t really know what's best for your child.'"
Payday Loans Best Option for Some
According to the Lancaster Eagle-Gazette, "[Payday lenders are] permitted to charge high fees, $15 per $100 loaned, on the theory that people would make one-time use of this service in emergencies. But too often, it hasn't worked that way for cash-strapped Ohioans who use payday lending as a last resort. By the time they get their next paychecks, they find themselves unable to pay back the loan plus fees, so they end up taking out a second loan to pay the first one, and on and on."
In
The Sound and Fury over
Payday Lending,
Buckeye Institute analyst Marc Kilmer
writes "Opponents of payday lending contend that lenders structure
loans to trap people in a cycle of debt, mercilessly preying on them to
extract maximum profitability. Again, there is little data to support
this. Studies show that repeat borrowers are no more profitable than
any other borrower. Furthermore, the evidence indicates that the
'cycle of debt' that may trap some payday borrowers
is not caused by payday loans. Instead, the borrowers’ shaky
financial condition is at the root of the problem. As evidence from
states that have banned payday lending illustrates, if these loans are
banned it will not eliminate the financial problems for these people.
In fact, by denying them this financial option, it may make their
problems worse."
Buckeye Institute in the News
In his weekly New York Sun column, Buckeye Institute Ronald Reagan Distinguished Fellow Ken Blackwell discusses Ronald Reagan's legacy in the 2008 election.
The testimony of Buckeye Institute guest scholar Dr. Tom Lehman on payday lending was mentioned in the Columbus Dispatch. His testimony before the House Financial Institutions Committee can be read here.
