NEW YORK -- As the bills from holiday spending sprees arrive, Americans are finding that the mountain of debt they've built has gotten even higher.

Consumer debt has more than doubled in the past 10 years to record levels, making it hard for many families to cope.

For Bruce and Lorraine Esbensen of Clifton Heights, Pa., trouble started when they spent lavishly on their wedding six years ago. They soon found themselves falling behind on their bills.

"Creditors were calling, and I knew if I paid one, I couldn't pay the other," Lorraine Esbensen remembers. "It was so painful I got to the point where I didn't want to answer the phone."

Credit counselors helped the couple work out a repayment plan, but it still took more than four years to pay down their debt.

"We still basically live paycheck to paycheck," she said. "But we do have an IRA (Individual Retirement Account) going now, and we're careful with our spending so we feel better."

Consumer debt hit a record $1.98 trillion in October 2003, according to the most recent figures from the Federal Reserve. That debt -- which includes credit cards and car loans, but not mortgages -- translates to some $18,700 per U.S. household.

At the same time, the government says the nation's savings rate dropped to just 2 percent of after-tax income in the first half of the year. That means many people lack the means to deal with financial emergencies, much less their eventual retirement.

Experts worry about the effect not only on individual families, but also on society as a whole.

"The Depression generation is passing on, and we're losing their values," said Howard Dvorkin, president of the non-profit Consolidated Credit Counseling Services in Fort Lauderdale, Fla. "Now we've got an entire generation that doesn't know anything about thrift and careful spending. It's tearing the fabric that made this country great."

Just how did American consumers get so deeply in debt?

Robert Manning, a sociology professor at the Rochester Institute of Technology who wrote "Credit Card Nation -- The Consequences of America's Addition to Credit," says the problem dates back to the 1980s, when financial institutions began issuing credit cards and making loans to people who wouldn't have qualified in the past.

"At the same time, people had this sense of entitlement based on the idea that this generation was expected to outperform the earlier generation," Manning said. "It was OK to buy yourself a better standard of living than your parents, and the banks would help you do it."

The nation's credit-card debt currently stands at $735 billion, or nearly $7,000 per household. And because about 40 percent of card users pay their balances in full each month, the per capita card debt of those who carry balances is closer to $12,000.

Americans currently spend a near-record 18.1 percent of their after-tax income to cover debts, including mortgages.

That limits their ability to borrow more to spend more, and consumer spending accounts for about two-thirds of the economy.

Economist Sung Won Sohn of Wells Fargo & Co. says that for now, most Americans are OK and should continue to be the driving force in the nation's economic growth.

Still, he said, the level of debt does raise concerns.

"In the long run, it's a ticking time bomb," Sohn said.

"At some point, when you get a sharp setback in the economy or a spike in interest rates, the high debt causes instability."

This story ran on SEATTLE POST-INTELLIGENCER on January 6, 2004.