If you’re trendy like me, you’re eagerly anticipating season 3 of Squid Game, set to release next month. For those who missed it, Squid Game is a cyberpunk dystopian drama where staggering income disparity in South Korea allows the ultra-rich to exploit poverty for horrible, futuristic gladiatorial battles.
Squid Game depicts how desperate people will do anything to break the cycle of debt and despair, so they can finally get their financial head above water. This was also the premise of the Oscar-winning Parasite, likewise from South Korea.
While these tales are certainly fictionalized, the sad reality is it’s not too far from the truth for our K-Pop inventing friends across the Pacific.
This situation is based on bad policy by the South Korean government, whose “financial services commission and financial supervisory service recently resolved to prevent more South Koreans from falling into debt” with extreme restrictions, as The Guardian reported. South Korea made it harder for people to get credit, which then made it harder to escape the aforementioned vicious debt cycle.
For what it’s worth, that example has also been copied by blue states like Illinois, which adopted an interest rate cap bill a few years ago, which in turn dried up a ton of credit in the state.
Which leaves one wondering why some in Congress want to bring the same bad policy here?
Last week, the Senate moved forward with the GENIUS Act (S. 1582). Authored by Sen. Bill Hagerty, R-Tenn., the bill would establish a long-overdue regulatory framework for digital assets like cryptocurrency. But unrelated to that good policy, Sen. Josh Hawley, R-Mo. has teamed up with Sen. Bernie Sanders, I-Vt., to add a terrible amendment that would cap credit card interest rates at 10% APR.
This may sound nice, but in practice, it would hurt the people it’s trying to protect — as is always the case with price controls as every economist knows and every Republican should not need to have explained.
These caps, if they became law, would result in potentially millions of consumers losing access to credit cards nationwide.
The average credit card interest rate is 28.63% APR, according to Forbes. If the government forces price controls on this industry — slashing the chargeable rates to almost one-third of that average — credit card companies lose the incentive to provide credit. They certainly don’t extend credit out of charity, they do it for profit.
If they have no incentive to provide this service — again, economics — then they will stop doing it. People will still need credit, so they have to search out increasingly risky options for that. (Like getting lured into Squid Game on the subway.)
This would also hurt Americans in Red States more than those in Blue States. While the average U.S. credit score is 715, it’s lower in many Red States, such as:
- Mississippi (680)
- Louisiana (690)
- Alabama (692)
- Texas (695)
- Arkansas (696)
- Oklahoma (696)
Hurt credit card companies’ ability to turn a profit and you hurt the people below the curve in these states more than people above it. If we think people are having a hard time covering day-to-day expenses after four years of Bidenflation and the permanent damage of the coronavirus lockdowns, just wait until they can’t use credit cards.
There is also the short-term necessary pain of the tariffs to get China to stop trying to blow up our battleships, and the fact that as much as President Trump wants the Federal Reserve to cut interest rates, the Fed has thus far not budged, and we’ve got the makings of an electoral bloodbath in 2026.
Last week’s cloture vote for Hagerty’s crypto bill passed the Senate 66-32, which is a pretty good sign that the final bill would sail through the Senate.
But if S. 1582 includes Hawley/Sanders’ bad amendment, there’s very little chance it would keep support from legitimately limited government senators like Cruz, Johnson, Lee, Lummis, Schmitt, or the two Scotts, or even more establishment or moderate senators like Cassidy, Collins, Cornyn, Curtis, Lankford, McConnell, McCormick, Murkowski, Sullivan, Tillis or Wicker — all of whom voted to advance the bill las week.
With Hawley/Sanders’ amendment attached, either this would suddenly become a Democrat bill, because they love price controls, or more likely the bill dies entirely. Hawley himself voted against cloture, so it’s possible he’s just advancing this amendment to tank the bill, which is the kind of legislative chicanery we don’t need from our side nowadays.
But whatever game he’s playing, it’s well past time for him to knock it off.
Jared Whitley is a longtime politico who has worked in the US Senate, White House, and defense industry. He has an MBA from Hult business school in Dubai, and in 2024 he won the Top of the Rockies best columnist award. Read Jared Whitley’s Reports — More Here.
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