Excerpted from the Buzzflash review

We’ve gotten to know Danny “the Media Dissector” Schechter since we started BuzzFlash and gotten to respect his passion and his work. Danny is a bit of a gadfly, a graduate of the civil rights movement who definitely has an impassioned point of view.

Danny has put together a fascinating and absorbing documentary on the most seemingly boring of all subjects: debt.

It’s not a high-budget film, but it is more powerful than many documentaries with 50 times the budget that we suspect Schechter had.

Schechter is the on-camera narrator of this accessible and insightful walk through the valley of American debt. By the end, you’ll be mad as Hell and won’t be able to take it anymore. But, you’ll probably blow off steam by going out and having a good dinner, which you will charge with a credit card.

And that’s the irony of “In Debt We Trust,” because the engine of debt in American society for many Americans is the ravenous and rapacious credit card industry, which has enjoyed unbridled support from both sides of the political aisle.

Credit cards go hand and hand with pumping a consumer society gone out of control. We are encouraged to buy our fantasies and pay on credit, even if we cannot afford the consumer product of the moment that we don’t really need, but that advertising convinces us that we can’t live without.

Credit card companies can only make their billions in profit if we go into debt. It’s a very simple concept, but they, as Schechter shows us, are masters at getting us to spend, spend, spend!

As a result, we are a nation in hock, literally. Not only are most of us personally deep in the red, but America is kept afloat by loans from overseas, including China and the oil-rich nations in the Middle East.

Somehow, Schechter makes all of this a gripping story that outrages as much as it makes us realize how much we have all fallen prey to the lure of the credit card driven debtors society.

Read the Complete Review

Documentary filmmaker Danny Schechter found the inspiration for his latest project in his back pocket.

Credit cards, and the rampant explosion of consumer debt that they represent, are the building blocks of an economic house of cards that Schechter says is headed for a fall in, “In Debt We Trust: America Before the Bubble Bursts.”

Narrated by the director in easy-to-understand layman’s terms, “In Debt We Trust” launches a wide-ranging broadside at the “financialization” of American life, in which easy credit with onerous terms has led many Americans deeply into debt and down the primrose road to modern serfdom.

Schechter strategically explores the various detrimental facets of financialization, from real estate gentrification that guts neighborhoods of their identity to college campuses where easy credit preys on the young to payday lenders who victimize military families to the halls of Congress where banks spend millions on bankruptcy reform legislation.

The former Emmy Award-winning producer for ABC’s “20/20″ and CNN skillfully makes the political personal by featuring people in trouble, including fellow filmmaker Joe Sucher and “Sopranos” star Lorraine Bracco, who openly discuss their own bankruptcies.

Because Schechter’s film takes shots at the very financial conglomerates whose advertising dollars drive most media today, “In Debt We Trust” is still in search of a distribution deal. To obtain a DVD of the film, visit www.indebtwetrust.com.

Bankrate caught up with Schechter to discuss credit cards, housing bubbles and the worrisome scenarios behind the skyrocketing national debt.

Bankrate: How’s your mortgage?

Danny Schechter: (Laughs) This mortgage crunch is serious. I think it’s being played down here, I think they don’t want to alarm people, but the trade publications and foreign publications are focusing on it a lot more than the American ones are.

Bankrate: Can a humble documentary filmmaker afford to live in New York City today?

Schechter: I have an apartment, but I bought it in 1981. I couldn’t afford it today, that’s for sure. I had a house in Boston and I sold it, actually too soon, but what the hell. That house led to having enough money to put into this film.

Bankrate: Did you go into this project looking to focus on consumer credit cards?

Schechter: There have been a lot of stories about identity theft and how vulnerable people are because of credit cards and credit card companies and how dependent people have become because of it. I’ve always been an investigative reporter; I was one at ABC’s “20/20″ for a number of years, and before that in print, and I wanted to ask some deeper questions: How do we understand this? What is actually going on here? And then I realized this is a lot bigger than just the credit card component of it, although that is pretty big. The consumer debt is mirroring, although smaller than, the national debt. The other side effects of all this — student loans, student debt, credit cards, bankruptcy, foreclosures on people’s homes — makes this a much bigger problem. I tried to stay with people who were either in the industry or have direct personal knowledge.

Bankrate: It’s not surprising that the major financial institutions declined to meet with you.

Schechter: Well, yeah. There were other films done; “Frontline” and PBS did a history of credit cards — I didn’t want to repeat that — and they gave people somebody from the American Bankers Association who basically managed to say nothing. I’m not one who believes that journalism has to be mechanistic, that there are two sides to every story. You can report on these issues and there is enough compelling information in the public record. When you know that somebody is going to give you a line, do you necessarily report it? Look at our news organizations; they have stopped reporting political conventions. They have come to the conclusion that these conventions are just TV shows and promotional events, not really news events, and they made a determination. I believe they should do the same with presidential press conferences today. Nothing is ever said at them. These are choices that we make as journalists.

Bankrate: You mete out equal criticism to Republicans and Democrats for enacting bankruptcy reform.

Schechter: I made clear that this was bipartisan. This is something that Democrats are not happy with because they’re being exposed as being part of this problem, not simply the answer to it. They can’t blame it all on Bush. I’m trying to get at deeper truths here, and I think I do, based on the reaction of audiences who’ve seen it. One of the things about this issue is, people will say, “Well, you think that’s bad, let me tell you about X” and you realize that this resonates with so many people but it’s not perceived as a problem, it’s perceived as a personal failing.

Bankrate: Declaring bankruptcy or getting in too deep with payday lenders, as the soldiers in your film do, is one of the last dirty little secrets in American life.

Schechter: Yeah, you don’t trade notes with other people. It’s like, you fouled-up, basically. Like my filmmaker friend who went into bankruptcy. It could never happen to him. This guy had all the angles played. He was cocky, he was sure, he was certain, and then he got nailed big-time basically because of a confluence of things including a divorce where he had to disclose all his finances. Suddenly what seemed like a very secure lifestyle became a very insecure lifestyle.

Bankrate: It’s chilling to see how close to the bone most Americans are playing it today.

Schechter: I just saw a report from England that said that 30 percent of the people are 30 days away from financial crisis. People are living on the edge, and they’re aware of it. You add to this unemployment. For instance, General Motors workers just got a big buyout. Well, you’re going to run through that in three years. Then what? You have a lot of people going for short-run gain, you have a lack of social safety net and no real health care compared to other countries.

Bankrate: Has financialization become so endemic in America that there’s no going back?

Schechter: Yeah, we’re all trapped in this, in part because it doesn’t have a reality to discharge it. It’s only later that it all catches up with you. You know, if you’re a kid, you want to look good in school, you want to have what everybody else has. You’ll notice there has been a steady increase … as brand names and consolidation affects a lot of different industries, the price of things has gone up dramatically. You go to the Gap, suddenly you’re paying $19.99 for something you could get for $9.99 before, whatever. The hidden costs of marketing and advertising are not really obvious to many consumers. The credit card companies have it down to a science, while we have it down to a bunch of hunches and guesses. We have become prey because they’re really aware of people’s vulnerabilities and needs. This is why this film is so important.

Bankrate: And also why it likely won’t be presented by your friendly financial institution.

Schechter: Now the struggle begins. You find that a lot of the distribution companies are tied into a lot of the big media companies, who are in turn dependent on a lot of advertising from a lot of credit card companies that bring you the Super Bowl and all these other events. You don’t want to alienate the people who are paying the bills, so there is a lack of courage to really question this, and this takes on the whole financial services and financial industry which is so irresponsible, so unaccountable. We’re up against a big target. Fortunately I have an executive producer who was able to pay for the film and has some money to help us market it.

Bankrate: You are even so bold as to question whether financial education can solve this problem.

Schechter: You need that. You want to have people more conscious of all of this, obviously. But it in itself is not a panacea, not a solution, because a lot of people use their credit cards for necessities. Normal people are using charge cards to buy food, to buy basic necessities. But if you get into an adjustable-rate mortgage and suddenly it all starts going up, it’s not your fault, but nevertheless you are exposed. Everybody is in a crunch figuring out how to pay their bills, and it’s becoming harder and harder.

Bankrate: You also show how the war in Iraq is contributing to the erosion of financial security at home.

Schechter: We’re paying for it in billions of dollars a day and people are not aware of it because it’s not coming out of their pockets, or so they think. But if you look at the cutbacks in various social expenditures, it’s having a very telling impact, on education and so many other aspects of American life. This is where financialization, the idea that the bottom line is the only law, is something that is a central belief in America but it also has consequences. Of course, television reporting on all of this would much rather stay with identity theft than the fines that were assessed on credit card companies. I really hope that we can break through the dense fog and get this issue out there.

Bankrate: How has making this film changed your life?

Schechter: I’m certainly a lot more conscious and trying to use my card a lot less. I’m certainly more aware of it, but I’m also aware of how seductive it is and how needed it is. You go to an airport for instance, how are you going to buy something? Or on the Internet? It’s very insidious and it’s very difficult to keep it (credit spending) down.

Bankrate: Why not just stop worrying and love the debt?

Schechter: No, there’s a lot that can be done. I mean, when you have 29 percent interest rate that is almost immediate (on a credit card), that’s worrisome. It’s usury. This is a function of a bought government. Politicians are in the pay of these companies and we need to do something about that. I worked at ABC News and CNN. In broadcasting, there is a shorthand called KISS - keep it simple stupid. The real world, though, is complicated, and there are a lot of interest groups and factors. Making a film about information is unfashionable. People would rather have a good story about one person rather than financialization and institutions. Oprah, to her credit, has helped mainstream this issue. I’m trying to get her to see this film.

“In Debt We Trust” Documentary Exposes America’s Growing Addiction to Credit Card Overspending

By Mike Killian, CardRatings.com Debt/Credit Management Reporter

Every now and then a film comes along which should be viewed by every single American. Such a film is the recently released In Debt We Trust- America Before the Bubble Bursts. This is a video by highly acclaimed documentary director, Danny Schechter. Among his more than 20 other recognized films is the award-winning expose Weapons of Mass Destruction.

His newest release, In Debt We Trust is inspired by the works of an individual who is no stranger to this site - Dr. Robert Manning, a Research Professor of Consumer Financial Services at Rochester Institute of Technology and the author of Credit Card Nation (Basic Books, 2000). The film gives great insight into the impact debt is having on young people and our society, and offers ways to empower the public with information on avoiding the traps of debt and dependency.

A frequently invited expert at U.S. Congressional hearings, Dr. Manning’s consumer credit research has influenced public policy debate on consumer debt issues. He has become one of the most outspoken critics of the nation’s consumer spending habits and lending practices.

According to Dr. Manning, the documentary helps expose several disturbing patterns, such as banking deregulation:

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“…deregulation of the banking industry in the 1980s has unleashed powerful forces that encourage banks to over lend and seduce consumers to overspend….People could be managing their lives better, but the odds are stacked against them.”

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I caught with director Danny Schechter. Danny’s comments were as hard-hitting as his film:

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“In Debt We Trust… is about a growing inequality that some experts fear will lead to a new 21st century serfdom. It’s about the transfer of wealth from working people into the vaults and accounts of a relatively small number of financial institutions and real estate interests. The lenders are profiting by charging usurious rates and doing so legally, in part, because they have mastered the art and science of marketing products and then manipulating media, politicians, and political institutions.

Most often, credit card abuses are examined in terms of individuals and consumer scams like identity theft. My film started with that approach but evolved into a much deeper look at what’s been called “financialization.” This is an institutional problem involving a growing debt-and-credit complex that threatens the very fabric of our nation, not just in terms of a possible financial crash in the future but how it is impinging upon our lives and livelihoods right now.”

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As a fellow consumer action reporter and counselor, I strongly encourage every reader to look for this film in one of its 4 versions: 30 minute television production, DVD version, full length theater version, or international version. Regardless of which version you watch, be prepared for a strong call to action.

In the words of the director:

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“Many at the TV news networks whom I have worked with over the years say you can’t cover complex issues, especially on economic questions, because “the dismal science” is boring and a turn-off.

My film is out to prove them wrong. The American public needs to know why debt has become “the enemy,” in the words of one of the people we interviewed. All Americans need to know what we can do about it.”

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I can only hope that the documentary garners mainstream media attention as it is a much-needed wake-up call. We simply can’t continue on the same course for very long.

We welcome your comments about credit card and other money issues in our popular credit forum!

Mike offers free consumer advice on the CardRatings.com Credit Forum as well as on his own site, FreeMoneyTraining.com. While at his site, you can view additional articles as well as his schedule of upcoming seminars.

New film takes swipe at debt problem ‘In Debt We Trust’ takes hard look at debt casualties who declare bankruptcy and the marketing practices of credit cards issuers.

By David Ellis, CNNMoney.com staff writer
August 4 2006: 1:51 PM EDT

NEW YORK (CNNMoney.com) — With Americans seemingly overwhelmed by mortgages, credit cards and automobile loans, it seems like everyone has something to say about the state of consumer debt in America nowadays.

A new documentary, “In Debt We Trust: America Before the Bubble Bursts,” offers its own take on debt in America looking not only at some of its casualties, but also the financial institutions that one expert says have created a “21st century serfdom.”

Danny Schechter, who developed, wrote and directed the project, realized during the production of the film just how big of a problem the issue of debt is. “It was getting increasingly clear it was an issue affecting people across the spectrum,” says Schechter.

And numbers appear to back up his case. Right now, American consumers have racked up $2.17 trillion in debt on their mortgages, auto loans and credit cards, according to recent data from the Federal Reserve.

Consumer advocacy groups, such as the U.S. Public Interest Research Group, estimate that the median U.S. household that does not pay its credit card bills in full every month carries a balance of $4,000 to $5,000.

While the film delves into the marketing and lobbying practices of the large credit card companies, such as MasterCard’s “priceless campaign,” it suggests that those efforts have led to such debt casualties as the young woman featured in the film who was forced to declare bankruptcy at the age of 21 because of her credit card abuse.

“Most people don’t recognize this as a social problem, they recognize it as a personal problem,” says Schechter.

While one expert in the film went so far as to liken the debt of Americans to a “21st century serfdom,” the film suggests that consumer spending, which makes up two-thirds of the U.S. economy, is ultimately what is driving Americans further into debt.

As far as solutions go, some experts in the film stress the need for regulation at the state and possibly the federal level, but also seem to suggest that a big push must be made by those affected by debt themselves - the consumers.

Schechter’s film, which made its debut in June at a film festival in Nantucket, takes on the issues of both individual and government debt in the United States.

While it might be difficult for the general public to view his documentary at their local theater until Schechter locates a distributor, he is confident his film will continue to remain a relevant issue for the American public. “It affects everybody,” he says.

August 8: FROM INVESTMENT NEWS.COM: IN DEBT WE TRUST IS NOW ON INDUSTRY RADAR SCREENArticle asks: *”Will the financial services industry have to fend off” new film?*

http://www.investmentnews.com/article.cms?articleId=55553&ht=

*Paulson changes subject to Social Security*

By Charles Paikert
August 7, 2006

The pension reform and estate tax bills got all the attention in Washington last week, but new Treasury Secretary Henry Paulson also got into the act, placing Social Security - another perennial hot-button issue - back on the political agenda.

Never accused of being a shrinking violet, he came out swinging in his first speech since moving over from New York-based Goldman Sachs Group Inc.

Despite the battering his new boss’ Social Security reform proposals have taken in Congress to date, Mr. Paulson signaled that the administration is ready to take up the fight again. The major budget issue that the country faces, he declared, “is the longer-term structural entitlements challenge staring us in the face.”

*Movie gadfly

Will the financial services industry have to fend off a Michael Moore-like attack from a documentary filmmaker?

Author, journalist and filmmaker Danny Schechter has begun screening his new documentary, “In Debt We Trust: America before the Bubble Bursts,” and is hoping to line up commercial distribution by the end of the year.

Whether the new documentary will have the effect of Mr. Moore’s “Fahrenheit 9/11,” which grossed more than $100 million, is open to question.

But there is no doubt that Mr. Schechter is going after the financial services industry with guns blazing.

Before screening the film in upstate New York, he told The Woodstock Times that the country’s dependence on debt has become a crisis and that the financial industry is being “protected by an absence of regulation on a bipartisan basis.”

For good measure, Mr. Schechter described “powerful financial institutions dominating the economy and the society [as] a sort of credit and loan complex very much like the military industrial complex.”

*Duking it out

Treasury Secretary Paulson pleased his former corporate colleagues by taking a jab at the Sarbanes-Oxley Act.

Although he didn’t directly refer to the controversial compliance law, he did say that “often the pendulum swings too far” when it comes to “corrective measures” to address corporate scandals.

But Securities and Exchange Commission Chairman Christopher Cox defended the law in an interview with The Financial Times.

Section 404 of the law, which requires top corporate executives to both sign off on detailed internal controls and have them audited externally, has drawn the most criticism. While calling the provision “benign,” Mr. Cox also conceded in the interview that “the implementation has been lacking.”

Meanwhile, Rep. Tom Feeney,

R-Fla., a critic of the law, called on the SEC to make changes, charging that “an overly zealous implementation” of section 404 has become too burdensome for American business.

Ups and downs

Although the massive heat wave that gripped much of the East and the Midwest last week finally broke, some big names in the financial world still may be sweating.

New York-based Citigroup Inc. was knocked off its perch as the world’s biggest bank in terms of assets by fast-growing rival London-based HSBC Holdings PLC.

HSBC reported assets of $1.74 trillion as of June 30, topping Citigoup’s $1.63 trillion in assets for the same period. HSBC’s assets grew by 16% in the first half of the year, compared with 9% for Citigroup.

Meanwhile, Bill Miller, the famed portfolio manager whose Legg Mason Value Trust fund has beaten the Standard & Poor’s 500 stock index for an unprecedented 15 consecutive years, also has taken his lumps, reporting “a dreadful second calendar quarter” in a letter to shareholders last week. The fund lost 5.67%, he reported, compared with the market’s slip of 1.44% for the quarter. Year-to-date through Thursday, the fund was down 8.94%, trailing the index by 12.62%.

Mr. Miller blamed his positions in such sectors as the Internet, managed care and homebuilding.

Like our spin? E-mail comments or suggestions to Charles Paikert at cpaikert@crain.com

http://www.investmentnews.com/article.cms?articleId=55553&ht=