Maxed Out Film Review: Maxed

Maxed Out Film Review: "Maxed Out" (2005). Maxed Out" (2005) seems like a particularly significant and prescient film in light of the recent subprime mortgage crisis, and how the fallout of the housing market may have seismic effects upon the confidence of Americans in their economy. The film shows the way unethical lending and banking practices feed off of Americans' desire to have 'the perfect home' or simply a home at all, and to emulate the lives of celebrities and the rich and famous on television -- or just around the block.

The film opens with perhaps the most grandiose example of this phenomenon. A cynical Las Vegas real estate agent explains how palatial, gated, and guarded communities are financed by bankers with underhanded and often unethical techniques. The houses in the middle of the desert have fake Italian names, and they are backed up by fake money. However, precious few of their so-called owners really have the cold, hard, ready cash to purchase the estates.

Instead, the homes are purchased, or rather mortgaged, with phony money -- as are all of the financial schemes detailed in the film. The film juxtaposes scenes of great wealth, like Las Vegas mansions and excerpts from the television show "Lifestyles of the Rich and Famous," with scenes of horrific poverty, like post-Katrina New Orleans and pawn shops.

The film does not blame one single element of American society for the fact that America is radically divided between haves and have-nots, and the quagmires of debt in which Americans are drowning. Rather, it suggests that this is the product of a variety of cultural, political, and economic phenomena. The film suggests that America has a profoundly schizophrenic attitude towards wealth, exemplified in its love of excess but also in the cautious, almost Puritanical fear of wasting money.

The latter is exemplified in an educational film meant to educate people about the best ways to spend, save, and borrow money, narrated by Mr. Money. The former is exemplified in the sense of entitlement that causes Americans to borrow money so they can live in the moment, or seem wealthier than they are -- in a nation where status is tied to wealth, no one wants to seem impoverished, like the poor residents of the 9th Ward in New Orleans.

Even politicians encourage this love of spending -- after 9/11, Americans were told that they should spend to improve the health of the economy and to show that the terrorists had not 'won,' as if shopping and patriotism were synonymous.

However, the market does not support such constant borrowing, either on an individual basis or on a collective basis -- only a few years after this urging of Americans to spend, Congress had to investigate questionable banking practices, and George Bush made it more difficult for ordinary citizens to declare bankruptcy. People were encouraged, culturally, socially, and even by their elected leaders to spend money they did not have, and suffered the consequences.

Also, many of the politicians, including President Bush, who encouraged Americans to spend, spend, spend the economy out of recession and spend themselves into debt, received financial contributions from credit card companies. Economics is often described as a study of scarcity, how to allocate finite resources and to make choices. Every choice has an opportunity cost.

But the use of credit often makes it seem as if people can have everything -- everyone is a 'preferred customer' who can fill in an application for a credit card, even a poor college student without a full-time job and tens of thousands of dollars in student loans. Also, many people do not understand exactly how an interest rates can function and come back to haunt them in the long run.

Homeowners who took out mortgages with adjustable interest rates might find themselves paying exorbitant amounts to banks when the Fed raises interest rates, and many borrowers did not really appreciate the full implications of interest rate spikes when they signed their mortgages. The prospect of owning one's own home seemed so important, important beyond reason. Many people seem to assume that if they are given a credit card or a loan that must mean that it is 'okay' for them to accept the loan.

They do not realize that lending institutions are in the business of making money, and want to take advantage of their gullibility. Maxed Out" is a frightening film. It is.