As John Campbell points out in "The Boom in Busts" (Q1, 1998), millions of American families are overextended on credit. While consumers share some blame for getting in over their heads, most made rational choices given the manner in which credit is marketed. They don't rack up $10,000 in credit card bills; they borrow $5,000 and, by making minimum payments at 18 percent interest, they quickly add an additional $5,000. Banks fall over themselves to offer more credit to those who carry the biggest balances, since they pay the most interest.

Let's get real, lenders. Tightening up the bankruptcy laws is not going to make your bad debt problem go away. The family budget is a fixed pie. Some debt made at 18 percent is simply uncollectible. Making those loans at high rates means you are compensating yourselves in case you lay a few bad eggs. Once laid, the chicks will come to roost whether we forgive them in bankruptcy or not.

Gary Klein, Attorney National Consumer Law Center Boston, MA

Campbell raises several issues surrounding the causes of personal bankruptcy and the merits of proposed legislation to increase debt repayment. The causes of bankruptcy are complex, often rooted in life events, ranging from divorce to job loss to health emergencies. While bank credit cards appear as a convenient scapegoat, unsecured debts on bank credit cards accounted for less than 16 percent of the total debts listed by petitioners over the last decade. The eroding stigma associated with bankruptcy as well as the lack of awareness of bankruptcy alternatives and the flaws in current law must also be fueling filings.

The current bankruptcy system is the only social welfare program in the U.S. that does not require individuals to substantiate the amount of relief they need. Today, too many individuals walk into court and walk away from debts they can afford to repay. That is not fair to the majority of consumers who pay their bills for, in the end, they pay for those who obtain more bankruptcy relief than they need.

Thomas A. Layman, Ph.D. Senior Vice President VISA U.S.A.

BEYOND 9 TO 5

In "Working at Odd Hours" (Q1, 1998), Jane Katz notes that child care is hard to find and expensive to secure for parents working nonstandard hours. The problem is acute for single parents. There is not an easy, one-size-fits-all solution. Offering on-site nonstandard-hours child care is difficult and expensive for most employers; sizable company subsidies are needed to make the costs affordable to low- and moderate-income workers. A more feasible option would be to develop and build community-based partnerships and collaborative networks that include city and state governments, interested employers, and center-based and family day-care providers. Partnerships would provide financial incentives and reasonable guaranteed minimums to providers offering expanded hours, and allow communities to develop options suited to their needs.

Mary M. Lassen, WEIU Elaine Fersh, Parents United for Child Care Boston, MA

REGIONAL CONVERGENCE

Steven Sass rightfully concludes in "Leapfrog and Catch-up" (Q1, 1998) that the knowledge-based regions of today are not likely to succeed like the Northern economy of yesterday. He cites several reasons, the most important of which is that there are significant diseconomies in the agglomeration of activities in a metropolitan area. These costs include higher business and living costs, and a poorer quality of life, so important to many workers in knowledge-based industries. Moreover, the technology upon which knowledge-based industries are founded makes it easier for businesses to locate in far-flung places where costs are lower and urban problems are not as prevalent.

The New England economy is well positioned to succeed primarily because of its venerable institutions, but the technology that is driving the region's economy will ensure that it will never significantly outdistance much of the rest of the nation.

Mark Zandi, Chief Economist Regional Financial Associates West Chester, PA

Sass provides a good explanation of the convergence of northern and southern incomes, but he ignores the significant contribution of air-conditioning in the ability of the South to attract capital. While economic theory would suggest an inevitable convergence of returns on capital and labor when there are two adjacent, open economies, the reality is that significant northern investment in the South did not occur until northern managers were willing to move themselves and their capital to the region. As Raymond Arsenault has pointed out, it was the conquest of the South's languid warm seasons that made the relocating of factories and human capital more practical.

Also, the photo identified as Route 128 in Waltham (page 16) cannot be correct. There are no complete clover-leaf interchanges along Route 128 in Waltham.

Ozan Gurel Cambridge, MA

editor's note You are absolutely right; the photo was incorrectly identified. We apologize for the error.

We welcome your letters. Send them to The Federal Reserve Bank of Boston, Regional Review, P.O. Box 2076, Boston, MA 02210We welcome your letters. Send them to The Federal Reserve Bank of Boston, Regional Review, P.O. Box 2076, Boston, MA 02210