The result is that only one third of households making more than $100,000 a year (and 40 percent making $50,000 to $100,000) agree with the statement "I can afford to buy everything I really need." Overall, "half the population of the richest country in the world say they cannot afford everything they really need," she concludes. "And it's not just the poorer half."
Nowhere are these problems more evident than in New York -- a city in which there is no middle class, or where middle-class life requires upper-class means. Lisa O'Brien, president of the New York Charter Schools Association, is typical of the six- and seven-figure hand-to-mouth earners: She and her husband, Daniel, a commercial-real-estate developer, still have trouble paying off their American Express card some months even though, after some bad business years, Daniel's income topped $1 million last year. Although they've finally succeeded in taking care of the balance of their $100,000 Saratoga Springs wedding five years ago, Daniel only opened a 401(k) last year. "It's unbelievable," she says, her perky voice dropping. "How can we make so much and have this little to show? I wasn't raised to live like this. It's a sickness."
Most Americans rely on credit cards to fill the gap between reality and desire. Many spending disorders would remain latent tendencies without the enabling credit cards. Kim Miller, for example, who spent $60,000 on consumer goods while getting a Ph.D. in English at sunyBuffalo, had 21 credit cards: Whenever she maxed one out, there was always a fresh start greeting her in the mail.
According to economic sociologist Robert Manning, author of Credit Card Nation: The Consequence of America's Addiction to Debt, 60 percent of Americans do not pay off their balance in full each month; these families average more than $12,000 in credit-card debt, which means they're paying $1,800 to $2,200 in interest alone every year. And at 18 percent, interest rates have never been farther from the prime-lending rate, 4.75 percent. (Many of the people carrying balances would be eligible for bank loans against their mortgages.) Paying the minimum monthly balance on $12,000, it would take at least 30 years to reduce the debt.
The average rate of savings fell from 10 percent of income in 1980 to zero in 2000 -- a fact that economists fear will have long-term negative consequences for the economy as a whole (although savings increased very slightly as consumption has declined during the recession). People are offered credit lines that are much greater than they can afford with their income. If applicants dissemble a little on the form, the disparity can be increased exponentially. Yet attempts at credit-card reform are routinely defeated. (The credit-card industry was a major campaign contributor to President Bush.) The result: One in 69 American households has filed for personal bankruptcy. And the figures are likely to go up.
Like other people with money disorders, A.J. has plenty of insight into her problems' origins, but -- as the saying goes -- the insight never put a nickel in her pocket. "On a good day -- a non-bloating, going-to-the-gym day -- shopping is a celebration," A.J. explains matter-of factly. "On a bad day, it's making up for feeling fat and ugly and hairy like a monster."
In North Carolina, her family lived near the poverty line in a preppy, class-conscious area -- the kind of place where all the kids wore Polo Ralph Lauren and the like. All of her feelings of insecurity became transposed onto these external differences -- feelings with which her parents did not empathize. She sees her "propensity for label-whoredom" now as all about trying to "go back and get acceptance from the peers who rejected me as a small person who didn't have the right uniform." She remembers once as a child cutting out a paper alligator and pasting it on a Dollar-Mart shirt. It still pains her to think about how it didn't fool anybody.
Her first attempt at getting help was five years ago when she went to BuCCS, a debt-consolidation agency. Debt-consolidation agencies were originally a noble idea, funded by the banks, but as their numbers grew they were underwritten by credit-card companies themselves. The credit-card companies pay the agencies a kickback -- a percentage of the debt they were able to collect from clients -- creating an inherent conflict of interest. Under the guise of nonprofit organizations, the agencies, in fact, function as collection agencies of last resort (their boards are often dominated by people who work directly for credit-card companies). Although BuCCS is one of the better agencies, A.J. wasn't able to adhere to the plan it created for her because the psychological problems that got her into debt had not been addressed.