Debtors Prisons are Back…

...and as illegal as ever, but that's not stopping collection agencies from having people arrested.

Take, for example, what happened to Robin Sanders in Illinois.

She was driving home when an officer pulled her over for having a loud muffler. But instead of sending her off with a warning, the officer arrested Sanders, and she was taken right to jail.

"That's when I found out [that] I had a warrant for failure to appear in Macoupin County. And I didn't know what it was about."

Sanders owed $730 on a medical bill. She says she didn't even know a collection agency had filed a lawsuit against her.

"They say they send out these court notices, and nobody gets them," Sanders says.

That's right. $730. The problem with the recession and its aftermath is that the credit, collection and debt practices are almost exactly the same as they were before the recession -- only now, people are still in financial difficulty due to high unemployment, low salaries and depleted savings. The punishment, in other words, doesn't fit the crime.

This is tangential but something I've been thinking about: what if the government forced the big three credit ratings agencies to roll back credit scores to pre-recession levels? It would cost almost nothing and would go a long way towards allowing Americans to rebuild their lives.