In Market Street in San Francisco, there used to be plenty of consumers weighed down by heavy shopping bags.
But that is not the case anymore. They are weighting down by heavy debt. There is a structural change in the economy, as $4 a gallon gas and no easy credit is creating new headaches for people who thought they were flush.
"I know quite a few people who are under water and have home equity loans that way overextended," said East Bay resident Lori Zorr.
It's a new reality for people who never had to watch their budgets, they could shop at high-priced stores, they could afford to buy and gas up low-mileage vehicles.
They could pull out their credit cards or pull out equity from their fast-appreciating homes.
"They" are the middle class.
Dan Parrish is seeing a lot of them at Consumer Credit Counseling.
"It's very painful for the clients that we are seeing, that have never have to ask for help before or had to really worry about actually managing their budget on a regular monthly basis. It's a major life change for them," said Parrish.
Parrish says they're coming in with $20 to $25,000 in credit card debt. To retire that debt, they have to change their ways.
San Francisco business owner Ivan Kirigin says people don't need a second or third car, or to go on European vacations.
They do need to cover fast-growing expenses they can't control.
"Well if they ever have another housing boom they can go back to it, but that is not going to happen for another 15 or 20 years. So yeah there are big changes that most people will not have that easy access to cash," said Kirigin.
The middle class spending spree is over, which is tough on the ego and the psyche. Paying cash and being debt-free are a new way of living.
"It's very new and it's not a pleasant situation or a pleasant feeling. But they are feeling it as well at the same time," said Parrish.
The American savings rate has always lagged far behind the pace of other major nations. That's why the middle class is feeling so much pain. It doesn't have money set aside.
"So they really need to face up the fact that they've got to make the changes if they want to survive," said Parrish.
The latest figures indicate show the personal saving rate is about one-half of one percent. Five years ago, it was almost three percent.
As for those people with $20-$25,000 in credit card debt, with guidance and lots of discipline, they can erase those debts in about three to four years.
