A Horror Movie For Our Times

By Michelle Singletary
Sunday, March 4, 2007

For this month's Color of Money Book Club selection, I'm doing something a little different.

I'm recommending both a movie and a book. And trust me: Both will have you rethinking the deep dependence so many of us have on credit.

The twofer this month is the feature-length documentary "Maxed Out" and a companion book, "Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders" (Scribner, $24).

The movie opens in select markets beginning Friday. To find out if the film is playing in a city near you, go to http://www.trulyindie.com and search under "Coming Soon." I think every high school at least should show the film to its student body.

James D. Scurlock, author and director of "Maxed Out," hopes to do with the overselling of credit what former vice president Al Gore has done for global warming -- elevate people's consciousness about a terrible threat to our existence. In this case, it's our financial well-being.

Both the book and film examine the proliferation of debt in America. Among others, Scurlock interviews debt collectors, a Harvard professor, pawnbrokers, people in debt and the people who have watched loved ones struggle with debt. I laughed at old black-and-white clips of students being taught how hard it is to qualify for credit. You have to have good character and a proven capacity to pay it back, an unnamed man tells a young boy and girl.

I was most moved by two mothers, Janne O'Donnell and Trisha Johnson, who sit side-by-side and talk about their children -- college students -- who committed suicide largely because of credit card debts. O'Donnell's son had amassed a debt of $12,000 on 10 credit cards. Johnson's daughter was a freshman when she spread her credit card bills on her bed and then hanged herself. She owed $2,500.

Scurlock's book takes you along on his journey to make the documentary. He takes a few missteps in the beginning when he criticizes radio talk-show host Dave Ramsey, who rightly encourages people to get out of debt and shun credit (except for a home mortgage). As in his film, Scurlock's snide references to tithing come off as useless potshots rather than insightful dialogue. People are not in debt because they tithe, as he seems to suggest.

But when Scurlock focuses on the larger issue of easy credit, he's right on the money.

"The federal government -- and the majority of Americans -- can no longer get by a single day without taking on additional debt," Scurlock writes. "And as more borrowing goes to simply pay off old debt, or to make interest payments, the new debt does little more than increase banking profits."

Here are some facts Scurlock points out:

· The Commerce Department reported that the nation's personal savings rate for all of 2006 was negative 1 percent, the worst since the Great Depression.

· From July 1, 2005, to last June 30, there were almost 1.5 million personal bankruptcy filings.

· Credit card issuers have increased the number of mailed credit card offerings sixfold since 1990, from just over 1.1 billion to a record 6 billion in 2005.

· Revolving credit card debt, the amount you don't pay off every month, increased 6 percent from $827 billion to $876 billion in 2006.

· Low- and middle-income households have, on average, $8,650 in credit card debt.

"There is an even greater misconception at work," Scurlock writes and presents in his film. "A misconception that debt is not what it used to be. That there is 'good' debt, for example, and 'bad' debt. The idea that one should stay out of debt, period, is now considered unrealistic. Even more frightening is the notion that debt is our friend -- a magical tool that allows us, in the words of Napster's new ads, to 'own nothing, have everything.' "

That definitely deserves an "Amen."

Scurlock said his goal for the book and the movie was to "paint the story of our debt-fueled culture in broad strokes." He says he wants to challenge the assumptions about the way we live our lives and shift the debate.

"Do we really want to be in perpetual debt?" he asks.

Read this book or watch the movie and perhaps you'll answer with a resounding "no." The movie opens Friday at Landmark's E Street Cinema, 555 11th St. NW.

To become a member of the Color of Money Book Club, all you have to do is read the recommended book. Then we chat online with the author. In addition, every month I randomly select readers to receive a copy of the book, donated by the publisher. For this month's selection, Truly Indie, the distributor of "Maxed Out," is also giving me free movie passes for book club readers. To win either a book or movie pass (you can't have both) please e-mail your name and address tocolorofmoney@washpost.com.

If you are interested in discussing this month's book and movie selection, join me online athttp://www.washingtonpost.comon Thursday, March 29. Scurlock will be my guest and will take your questions.

· On the air: Michelle Singletary discusses personal finance Tuesdays on NPR's "Day to Day" program and online at http://www.npr.org.

· By mail: Readers can write to her at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071.

· By e-mail: singletarym@washpost.com.

Comments and questions are welcome, but because of the volume of mail, personal responses are not always possible. Please note that comments or questions may be used in a future column, with the writer's name, unless a specific request to do otherwise is indicated.

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