I'm still paying for groceries I bought for my family years ago," said Julie Pickett. She meant it literally. The Picketts are profiled in a report, titled "Borrowing to Make Ends Meet," by a nonpartisan public policy group called Demos: A Network for Ideas and Action.

Mrs. Pickett and her husband, Jerry, of Middletown Ohio, are trapped in the iron grasp of credit card debt. Julie Pickett stopped working full time when she had the twins. Jerry Pickett's business hit a downturn about the same time. The family's credit cards, said Mrs. Pickett, suddenly looked as "lifelines" to the daily necessities—food, gas, auto repairs, clothing for the children. Another child was born and the credit card debt eventually reached $40,000—an amount (with its perpetually increasing interest) that the Picketts are unable to pay off. The Picketts, like an increasing number of American families today are incurring debt at an increasing rate.

Harvard's bankruptcy law instructor, Elizabeth Warren, claims her studies show that "families in financial trouble are working hard, playing by the rules—and the game is stacked against them." Warren and others cite the increasing costs of childcare, housing, and education while real income, adjusted for inflation, has not kept pace. For an average family budget in 1973, 54% would go to mortgage, insurance, and other fixed costs, leaving 46% for discretionary items. In 2003 that same average family budget, resulting from two wage earners instead of one, would require 75% for mortgage, insurance, and fixed expenses leaving 25% for all other expenditures.

Others, however, like Boston College social economist Juliet B. Schor blame a crassly materialistic culture for creating the "overspent American." Take Karyn Bosnak, for example. Karyn, a TV producer, found herself in deep financial straights after she moved to New York to take a $100,000 a year job on an ill-fated courtroom program and quickly ran up $20,000 in credit-card debt. "Unfortunately, the job went away, but the bills didn't. In my mind I was making a lot of money, so I should live like I make a lot of money." Forced to accept a much lower paying job on an Animal Planet show, Bosnak scaled down her voracious spending habits, but still found herself carrying around bills that she estimated would take 40 years to pay off at the rate she was going.

According to the Demos report, between 1989 and 2001, credit card debt in America almost tripled and the savings rate steadily declined. In this period, credit card debt for middle-class families rose 75%, and for very low-income families, with annual incomes below $10,000, the increase was a staggering 184%. Some of this increase can be attributed to