According to a recently released report from the New York Fed, Americans collectively owe over $1.1 trillion on their credit cards. Reports like this have a tendency to elicit bad ideas from politicians. For instance, Donald Trump has called for federal caps on interest rates charged to those who run up credit-card debt.
Except that readers know the obvious implications of such a cap. There’s nothing kind or good-hearted about it. When prices in the marketplace are meddled with, scarcity of the market good is the logical result. Price controls are cruel. Still, there’s an answer to the perceived problem of credit-card debt, and it already exists in the marketplace: debit cards.
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