"Americans are not going broke over lattes!"

A big part of your argument is based on this idea that parents are putting more money into their homes because they want to be in a good school district. But how do you determine why people are buying the homes that they do? Isn't it possible that people just wanted a more expensive home in a classier neighborhood, and now they can't pay the mortgage? How do we know it's because of the school district?

It's two halves of the data. One half is that median families aren't buying houses that are much bigger than a generation ago, notwithstanding all the talk about McMansions and spa bathrooms. A family today is more likely to live in a house that's more than 25 years old -- old wiring, old paint, old plumbing. They're not getting more.

The other half is to look at the studies of what a good school district yields in terms of prices. A 5-point increase on fourth-grade reading scores will translate into thousands of dollars in the value of a home in that school district, as opposed to the neighboring school district that didn't have the rise.

Housing prices strongly mirror the perceived strength of the school district. It's the only thing that fits the rest of the housing data. The houses haven't gotten much bigger. They're not newer. They don't have a whole lot more amenities. The average new house built in the U.S. is larger, but that's not what the median-income family is buying. The median-income family is buying a little bit more house for a whole lot more money.

How do you think that the public school system could be reformed to stop the bidding war for housing in good school districts? And how do you think that could be accomplished politically, because obviously if so many parents have made this enormous investment in buying these houses to get into good school districts, if suddenly the whole system goes into flux that's going to massively undercut their investment. Aren't people going to freak out?

There's obviously some risk. But let me offer a different way to think about it. Mortgage costs for families with children have grown at twice the rate of [those for] people with no children. As long as school assignments are made by ZIP codes, parents will behave rationally. They will buy the most expensive ZIP code that they can afford and try to get their children educated. If school assignments throughout a region were made on some other basis than ZIP codes -- by test scores, by interests, by needing a tuba player for the high school band -- then parents who can afford $50,000 homes, $250,000 homes or $1 million homes would have the same educational opportunities for their children. And that means that parents could shop for homes that they could afford, and then look for schools that better matched their children, regardless of ZIP codes.

How do you get there? I've actually been talking to a lot of folks in Washington about this. I'll give you the very short version: Up until the 1950s, highways were always local.

You paid for them with local taxes; they weren't even statewide by and large. Somebody had the idea of building the big federal interstate system, and the way that they did it is that they just put up federal dollars, and said if you'll build according to this plan, then we'll give you a lot of federal matching dollars.

It would be possible today for Congress to agree to put up a commitment: 10 years of money to the first 10 school districts that want to try regional school choice. You give the principals some money to work with beyond what they get from the local tax dollars, and let the schools differentiate themselves from each other.

I think that this is the last best hope for keeping middle-class parents in the public school system. I'm really worried that the public school system is in grave danger.

You write that nearly nine out of 10 of these families who'd filed for bankruptcy did it because of job loss, medical problems, divorce or separation. These problems are obviously not new. So, why is there so much more personal bankruptcy now?

It's two things that are happening simultaneously. The first is that today's family is more highly leveraged. With larger fixed expenses, they have less room to cut back.

When you lose a job, it's not possible to say: "Oh, we're just going to pay 20 percent of the mortgage this month."

The other part of it is that risk has actually increased. The chances of losing a job are greater today than they were a generation ago. The chances of having an ill family member are greater.

Because people live longer?

Because people live longer and because things that killed people a generation ago don't today. And that's the good news, right? But it has an economic ramification. And hospitals have changed. They send people home quicker and sicker. And that means a family member has got to be there to take care of them.

One of the men in your book ends up living in an efficiency apartment with no furniture, and he has two ex-wives and five kids. Doesn't this case promote the overconsumption myth in a different way? Some people would look at this guy and say: "This guy shouldn't have had five kids. He can't support them."

And now he's broke. So, they won. They're exactly right!

I can only deal with the realities. Some guy got married in his 20s, and had two kids. Got divorced, married again in his 30s, they had three more kids. Should he not have? Maybe. But I don't know what we're supposed to do about that today.

It's a fair point. We tried to write these families up -- warts and all. But the point that we were actually trying to make with the story is the position that his ex-wife is in. Maybe she shouldn't have been foolish enough to marry someone who'd been married before. But if that's the standard, I don't know where we're going to go.

Our real point was her financial world has been turned upside down. She cannot afford the house that she is living in, trying to keep three children in middle-class schools. And the solution to her problems is not to squeeze him harder for child support.

Divorced women trying to support children are in economic chaos, and once again the conventional wisdom is that the law just needs to squeeze ex-husbands harder and the women's financial problems will be solved.

Our data showed that's just not so. The money is just not there. You could put this ex-husband in chains, but that's not going to produce enough money to pay her mortgage payments.

You're right: Maybe he shouldn't have had children. But we don't get to say after the fact to the children that "Gee, you shouldn't have been born."

Do you think that the overconsumption myth makes it easy to continue scapegoating bankrupt people, rather than, say, reforming the lending industry?

The people we interviewed would not tell their parents that they had filed. They would not tell their brothers and sisters.

They hid it from the neighbors and often tried to hide it from their own children. When we interviewed people, they would sometimes say: "I'll help you with your study, but you can't say the word, because I can't run the risk that one of the children will pick up the extension phone and hear you." Or, others would say, "because I can't bear to hear it."

These people were deeply humiliated, and most of them believed that they were the only ones.

It really is like the perfect political issue where no one will ever take action, because they're all too ashamed.

But you know, things change. There was a time when people didn't want to talk about divorce because it was so shameful. There was a time when people didn't want to talk about AIDs because it was so shameful. We've seen stigma undermine families before. And those things can change.

The families who are filing for bankruptcy are hardworking, play-by-the-rules people, who are doing the best that they can for their families. They do everything that they can to avoid bankruptcy.

I have no doubt that there are some people who misbehave. I just don't think that's the typical debtor who files for bankruptcy. In fact, I think it's pretty rare.

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