Drowning In Debt & Maxed Out

You may not be, but odds are you know someone that may be quietly drowning in debt and/or maxed out. Sadly, that's become the state of many middle-class Americans. Equally unfortunate are the often experienced feelings of shame, guilt, and failure and hopelessness that accompanies this financial situation. There is a stereotype that most middle-class persons that find themselves deeply in debt brought the situation on themselves by irresponsible behavior. However, more and more persons that tried to play by all the rules to achieve the American dream are finding that dream buried beneath a mountain of debt.

According to a report by the Center for American Progress:

"A common but misplaced assumption is that the growth in debt among middle-income families — those with incomes roughly between $25,000 to $70,000 a year — is the result of over-consumption through increased credit card debt. Rather, growth in debt is primarily due to heavier borrowing for investments in homes or education, both of which saw dramatic price increases in recent years. The cost of a college education, for example, grew by 24.6% between 2001 and 2004, after adjusting for inflation. "

Now that the changes in bankruptcy law and the changes to the required credit card minimum payment fees are history, the indebtedness of the American middle-class in no longer a national headline story. However, the number of families and individuals still drowning in debt has not decreased.

The Economic Mobility Program of the Center for American Progress is convened a conference Wednesday, July 19 to examine the issues of household debt. During the conference I am sure that there was discussion of what corporations, the government and individuals can do. However, one of the most important points to recognize is that we live in an economy that promotes spending and indebtness. When the economy is sluggish politicians and economic leaders can be heard encouraging people to spend more.

People need to know that they can get out of debt and live debt free. It is not easy and will not be without some pain, sacrifice and patience. Living debt free requires a major change in mind-set and an understanding of the system that is designed to promote indebtedness.

Pamela Lyn

Note: even though the conference date has passed you can still obtain the conference materials from the website

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July 17, 2006

Debt Matters: Raising the Profile of Household Debt in America

As no time before, debt matters in America. For the first time on record, the total debt Americans owe exceeds the total income Americans earn. Americans' struggle with rising debt is contributing to a declining personal savings rate that has fallen to levels not seen since the Great Depression -- below zero percent. Families have often taken on record amounts of debt to manage low-income growth, thereby falling prey in many cases to unscrupulous lenders. Even the United States military has recognized the problem of household debt, naming predatory lending as one of the top 10 issues facing military families today. At the same time, many of the corporations that finance debt are reporting record profits.


To highlight these issues, the Economic Mobility Program of the Center for American Progress is:

Hosting an event: As the dramatic run-up in household debt is relatively recent, the implications for families and the economy are not fully known, and the public’s appetite for policy solutions has not been fully explored. To further examine these issues and put debt on the national policy agenda, the Economic Mobility Program of the Center for American Progress is convening a conference on household debt on Wednesday, July 19, titled “Debt Matters: Raising the Profile of Household Debt in America.” The conference will bring together state and national leaders to discuss creative approaches for addressing household debt and relevant issues in the credit and lending markets. Join us

Screening a film, Maxed Out:

Credit cards are one of the leading causes of the rise in personal debt. Today, 144-million Americans with credit cards (an average of 12 per household) owe some $813-billion in credit card debt. Sixty percent of households with credit cards — about 90-million Americans — do not pay their outstanding balances in full regularly. Not surprisingly, the companies that finance credit card debt are reporting record profits.

On Wednesday, July 19 at 6:30 p.m., the Center for American Progress will host a screening of Maxed Out. The film shows how the modern financial industry really works, explains the true definition of "preferred customer," and tells us why the poor are getting poorer and the rich are getting richer. By turns hilarious and profoundly disturbing, Maxed Out paints a picture of a national nightmare that is all too real for many of us. Maxed Out won critical acclaim at the South by Southwest film festival in Austin, Texas, in March, and Simon & Schuster plans to publish a memoir next year, which is based on Director James Scurlock's interviews and travels during the making of the film. Click here for more details.