Talk to lenders about excessive credit card debt and our somber friends in the wing tip shoes will paint a picture of irresponsible young nitwits.   Young people want everything. And they want it now. Unlike mature hard working Americans, the lenders will tell us, the record 1,662,000 debtors who headed for bankruptcy court last year are goofballs who borrow with no intention of paying the money back.

So they should be punished.

That's why the immensely profitable financial services industry--- which now accounts for more of the Standard and Poors 500 Index than any other industry--- has struggled to pass a major revision of the bankruptcy laws.

Fortunately, passage of the revision has been stymied for several years.

Until now.

As this is written, a tough revision to the bankruptcy laws is close to becoming law. Deceptively titled "The Bankruptcy Abuse Prevention and Consumer Protection Act of 2003" (HR 975), one expert describes it as a "one-sided contract."

  "This bill has gotten surprisingly little coverage, which is exactly what Congress wants," Harvard Law School Professor Elizabeth Warren commented recently. "(It's) no coincidence the House passed the bill during the week of the Super Bowl, the New Hampshire primaries, and Mars exploration (announcements), when no one was watching."

Professor Warren sees the rising rate of personal bankruptcy as an alarming indicator of social and economic stress. It is the result, she believes, of failing health insurance and rising job instability. Her case is detailed in "The Two Income Trap: Why Middle Class Mothers and Fathers Are Going Broke" (Basic Books, $26).

She isn't alone.

Teresa A. Sullivan, Graduate Dean and Professor of Sociology at the University of Texas at Austin---and one of the authors of "The Fragile Middle Class: Americans In Debt" (Yale University Press, $25)--- told me in late 2001 that there was a mis-match between the increasing risks in American daily life and our financial behavior. And Robert D. Manning, author of "Credit Card Nation" (Basic Books, $26), describes the marketing practices of the finance industry as "predatory plastic."

If you are inclined to think this is some kind of pinko-liberal cabal rather than the conclusion of serious researchers, I have two suggestions for you.

First, read the latest "important notice" from your credit card company detailing the terms of use for your card. I read mine, from Bank One, and found a bunch of nasty fees and a long list of ways they could immediately increase their interest charges to 25 percent. In the Burns household, we pay all balances monthly and don't pay any interest, but the fine print shows how much can be extracted very quickly when you run out of money before you run out of month.

Second, read a new report from Demos, a New York based public policy research group. They found a frightening increase in credit card debt among older Americans. "Conventional wisdom suggests that this segment of the population--- with lifetimes of financial experience, an over 80 percent homeownership rate, and a generational ethos of thrift--- would be immune to the record debt increases of the 1990s," their report notes.

In fact, older Americans are equally in danger of being run over by debt.

"Retiring in the Red," available on the Demos website, found that self reported credit card debt among seniors had nearly doubled from 1992 to 2001, reaching an average of $4,041. An earlier report, "Borrowing to Make Ends Meet," noted that self-reported credit card debt may understate actual debt because it is only one-third the level reported by the Federal Reserve.

The new report also found:

•  That credit card debt for those 65 to 69 had risen a stunning 217 percent over the same period, to $5,844.

•  That about 20 percent of households over 65 are in "debt hardship," with at least 40 percent of their income committed to debt payments.

•  That having medical insurance--- or not having it--- made a major difference in credit card debt. Families in the 55 to 64 age range, for instance, had seen a credit card debt increase of 169 percent if they had no health insurance but only 37 percent if they had health insurance.

I could go on, but you get the idea. You might also suggest to your Representative and Senator that they should do some reading before voting for the bankers. It wouldn't hurt to note, at the same time, that banks may be big political givers but they don't have the right to vote.

Related Columns:

Sunday, November 30, 2003: Debt Can Bankrupt Retirement

uesday, September 23, 2003: More Money, But Much Less Security

Sunday, November 11, 2001: Financial Planning In An Age of Terror  

On the Web:

The Demos website