Bernie Sanders and Alexandria Ocasio-Cortez have a new policy proposal out that would cap credit card and payday lender rates at 15%. Despite what I think are good intentions, this proposal would greatly harm poor Americans, and also impose some costs on the non-poor as well.

Here are some likely results of such a policy:

1. Reduced access to credit, especially for the poor and those with less human capital and riskier credit profiles.

2. The folks denied will turn to less reputable and more expensive forms of credit, from payday lenders who will surely charge higher fixed fees that won’t count as interest to actual loan sharks (rather than the banks accused of such behavior by these two). This is bad for many reasons.

3. One of which is that it will hinder their attempts to improve their credit rating and thereby get access to better credit card deals in the future. Getting a high rate card from an actual bank and making on time payments every month will improve your credit rating over time. This policy will extend the very reasons those behind it (wrongly) think it necessary.

You almost couldn’t imagine a policy better designed to hurt the poor than this one.

I would also not be surprised to see banks raise their annual fees and other fees to make up for the lost revenue. So this will impose costs on existing credit card holders as well.

There is a time and a place for debt, even at high interest rates. The riskiness of borrowers is a fact of reality and no policy can change that. It can only make the consequences of that fact worse for those it applies to.

Given how often libertarians are accused of this crime for the policies we support, I can only ask: Why do Sanders and AOC hate poor people so much?