From the Mirage of a Middle-Class Life to the Slavery of Debt

America is very wealthy country, but one has to wonder how much of our wealth is in fact a chimera, spun of a consumerist ideal and given the appearance of solidity by a flood of easy credit? How much poverty and real economic pain is covered up by an endless succession of pay-day loans and EZ-finance rip-offs that eventually just bury people under mountains of debt from which they have little chance of digging themselves out.

Today's bankruptcy rate is ten times what it was during the Great Depression, foreclosures are at a 37-year high and the United States has a negative savings rate, yet we're told every day that the economy is going gangbusters.

George W. Bush often points out that more Americans own their own homes today than ever before. He doesn't mention that they also have less equity in those homes than ever before. Every day brings news of the potential scope of the emerging "sub-prime" loan scandal -- what Robert Kuttner called "deregulation's latest gift" -- and new indicators that the housing market that's driven so much of the economy for the past five years is a bubble that's begun to burst right before our eyes.

Compounding our personal debt problems are our representatives, equally profligate spenders who are just as happy to run up enormous budget deficits and who reflexively guarantee and subsidize trillions of dollars of new loans to already strapped American businesses and consumers.

It's a pretty good time to ask ourselves just how we got here.

Writer and film director James Scurlock does just that in the documentary, and now book, Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders. The film is a sprawling look at the seamy underside of the American credit industry -- an industry whose practices have changed dramatically since deregulation, and not for the better -- and at those who end up caught in a trap of their own creation.

The film is not perfect. Its view is broad but lacks depth; while it makes its point with some really effective storytelling, the documentary acts on an emotional level but lacks the kind of narrative power that makes Michael Moore's films, for example, such controversial cultural touchstones.

What Scurlock's camera does brilliantly is lay bare an issue that affects millions of working Americans but is usually buried under layers of shame and taboo. The film tells the individual human stories that lie behind the bankruptcy statistics, behind the foreclosure numbers. The book, released this week, follows up with much of the narrative power and depth that the film missed.

AlterNet caught up with Scurlock by phone this week to talk about his project and the country's emerging debt crisis more generally.

Joshua Holland: You really tapped into something at the right moment -- people have become aware of the issue of debt, and we're now hearing about it described as an emerging crisis.

James Scurlock : When I started the project a lot of people didn't even know what bankruptcy reform was, but most do now. A few weeks ago, nobody knew what "subprime" meant and now because of this whole mortgage fiasco I think everyone knows what that means. So here we are, two years after the start of the project and everything discussed in the film and the book has gotten worse. As we talked to people for the film, it became pretty obvious that things were just totally out of control and there was this sense that at some point the chickens are coming home to roost and that's largely what's been happening. I'm not gloating about that -- it's really tragic.

But my sense -- and I've talked to a lot of people since the project's been done -- is that the really big system hits are yet to come. There are a lot of bad mortgages out there; there are a lot of these "liar loan" mortgages out there; there are a lot of credit cards and people used to paying off their bills by refinancing their houses every year.