One afternoon not long ago, Dave Ramsey received a call on his Nashville-based radio show from a young man named Jerry in Texas who was about to be married. "The problem I'm having is, well, first of all, I've been married before, and she's never been married before," Jerry began rather tentatively, "so, you know, the wedding is a little bit bigger than I expected." Ramsey laughed sympathetically. Jerry continued: "I have about five or six thousand dollars in credit-card debt now. She has about the same. And when she comes up with things like, well, you know, the limo is going to be this amount . . . I really don't have an option other than to put them on my credit card. So when I ask her, well, where is this money going to come from, I feel like my character is being assassinated, like I'm not being supportive, I don't want the marriage, I'm not going along with it."

 

At this point, Ramsey cut in: "You've got someone who is being financially irresponsible and expects you to do something just because they showed up. I mean, what are you going to do 30 years into this marriage?" Jerry remained silent. Ramsey went on: "You guys need premarital counseling in the worst way to determine if this marriage should go forward, and if it should go forward, you will pay cash for the wedding, not put it on your credit card, and we - she and you - will work to put together a budget.   "Jerry," Ramsey concluded, "do not marry this girl unless you get some premarital counseling. Period."

 

Well before the new bankruptcy law that went into effect on Oct. 17 made it harder for most Americans to wipe out credit-card debt, Ramsey was waging a one-man crusade against leveraged spending. At 45, he has worked for more than a decade promoting his vision of personal growth through fiscal restraint. "The Dave Ramsey Show" is broadcast for three hours each weekday on more than 260 radio stations, attracting some two million listeners a week, mostly from the Southeast and the Midwest. Ramsey rejects debt in nearly every form (credit cards, auto loans, 30-year mortgages, home-equity loans), advising followers to pay for every single purchase (oatmeal, bath towels, dishwashers, even a split-level) with cash. He reserves one day a week for callers to join him in screaming the words "I'm debt free!"

 

By the standards of the average caller, Jerry was doing pretty well. Many of Ramsey's callers have amassed an average of $50,000 in credit-card debt, on salaries well below that figure. More than nine million people have filed for personal bankruptcy since 2000, but, as Ramsey is fond of saying, "my calling isn't the macro, it's the micro - it's Joe and Suzy." To help Joe and Suzy, Ramsey has written three best sellers, including his most recent, "The Total Money Makeover." He is also the architect of a multistep debt-recovery and savings program called Financial Peace University, a 13-week videotaped course offered through churches and corporations and on 95 military bases. In addition, Ramsey has devised a version of the program for young people - Financial Peace for the Next Generation - which is now taught in 600 public and parochial schools. As an evangelical Christian, he insists that his followers make regular donations to churches or other charitable organizations. When I asked Ramsey about the wisdom of preaching philanthropy to those not yet back on their feet, he replied: "One way to bust the pity party is to be a giver. Giving breaks loose the whining child inside you." Such is Ramsey's influence in certain parts of the country that a classified ad in an Odessa, Tex., newspaper, announcing the sale of a Dodge Caravan ended with the words "Dave Ramsey said sell."

The son of a builder, Ramsey grew up in Antioch, Tenn., and then worked his way through the University of Tennessee in the early 1980's. By age 26, he had become a real-estate investor. His $4 million portfolio of properties was financed on various short-term loans, all of which came up for renewal at the same time. Ramsey, whose spending extended to Jaguars and exotic trips, was forced into bankruptcy. He and his wife, Sharon, whom he met in college, began saving, driving a borrowed car and doing without air-conditioning during sweltering Southern summers. It took them six years to pay off the $500,000 they owed the I.R.S. and friends they had borrowed from, and then, in 1991, Ramsey started a two-man company, the Lampo Group, to counsel people on financial matters. A year later, he began dispensing advice on WWTN radio in Nashville, initially free because the station, too, had fallen into bankruptcy. Today, Ramsey and his family live in Brentwood, a prosperous suburb of Nashville, but he and his wife still drive used cars and clip coupons. They have a dog named Heaven.

 

In the spring and the fall, Ramsey travels around the country to conduct six-hour seminars in more than a dozen of his biggest radio markets, attracting audiences of up to 8,000. Last year, his fall tour began in late August at the Petersen Events Center at the University of Pittsburgh. As he sat in a lounge, a few hours before he was to take the stage, he talked about the perils of borrowing money to pursue an education. "I really do get more hate mail on this issue than anything else," Ramsey told me. "Can you get a better tool set with a Wharton M.B.A. than a degree from Tennessee State? Yes, you can. But it's the application of the knowledge that is paramount. The location - where you went to school - is not. One of the calls that drives me the craziest is from the person who says, 'I'm $80,000 in debt because I got a master's in sociology.' There is an intrinsic value to a good education that you cannot quantify, yes, but I'm dealing with the guy who can't pay the light bill on Friday."

 

Shortly after noon, Ramsey took the stage, to roaring applause. By the end of the day, he had wrapped himself in chains, taken poultry shears to a stack of credit cards, charted how much money you would have at 60 if you saved a few hundred dollars a month today, quoted liberally from movies and proverbs and abused Shopping Barbie, which is packaged with a cash register that rings "Credit Approved." Ramsey delivers not only his own personal story at some length during these seminars but also those of his callers. A favorite involves a young man who wanted to rid himself of $6,000 in credit-card debt but worked only 20 hours a week. "I told him, 'I want you to be delivering pizza, working a construction job and delivering papers at 3 a.m.,"' Ramsey recounted. "'You do all that, and you'll be out of debt and taking your parents on a cruise for Christmas, because you live with them, don't you?"'

 

Ramsey likes to draw contrasts between what he views as the productive habits of the entrepreneurial class and the slothful proclivities of those in the lower rungs. "The average millionaire can't tell you who got voted off the island," Ramsey told his transfixed audience. The average millionaire, he said, reads two nonfiction books a month.

 

Adopting the Ramsey financial plan means tackling debts from smallest to largest and saving for three to six months of emergency expenses. The final steps are opening Roth I.R.A.'s and paying off home mortgages. But the key is the creation of a strict household budget organized around a set of envelopes in which cash is distributed for regular necessities. If you borrow from the gas envelope to pay for six pizzas, you have to take the bus.

 

mplicit in Ramsey's teachings is the notion that debt is a moral weakness, a failure to embrace Protestant values of industry and restraint. To a degree, Ramsey is resurrecting an idea that until the 1950's remained central to American life: owing money was sinful. A popular story about a young girl named Lizzie, written by Irving Bacheller in 1911, depicted how vain and mindless spending manages to erode the moral fiber of an entire town. Yet as Daniel Bell argued in his classic 1976 text, "The Cultural Contradictions of Capitalism," America's postwar transition from an economy of production to one of consumption depended on families living beyond their means. The language of "installment selling" carefully avoided the word "debt," thus removing any moral taint from the notion of borrowing.

 

Even so, 30 or 40 years ago, Ramsey's proselytizing would have found few adherents not just because shame about borrowing money was still built into the social fabric but also because borrowing money wasn't quite so easy to do. Before the 1980's, credit in America was dispensed sparingly, but in 1978 a Supreme Court ruling in Marquette National Bank of Minneapolis v. First of Omaha Service Corporation paved the way for banks to export interest rates beyond state borders. This meant that a lending institution in South Dakota could now grant loans at 24 percent to someone living in New York or in one of the many other states where the ceiling on interest rates was far lower. At the same time, banks began aggressively developing their consumer-product divisions, making high-limit cards available to those of moderate means. For anyone with a marginal credit rating who might miss just one or two payments, interest rates can quickly reach 30 percent.

 

It is when railing against credit-card companies that Ramsey, a self-described social conservative, sounds most like a liberal. Ramsey is as likely to attack the tactics of marketers as he is an individual's failure to resist them. When bankruptcy legislation, deemed by Democrats to be creditor friendly, first came up for debate in Congress two years ago, Ramsey lambasted Republicans for supporting it, calling it "the Visa Reform Act." Though he is opposed to bankruptcy filing, Ramsey faults the new law for doing little to help consumers develop more prudent habits.

 

His populism has brought him fans from across the political spectrum, but Ramsey is not without his share of fierce critics. For Robert D. Manning, a professor of finance at Rochester Institute of Technology and the author of "Credit Card Nation," Ramsey overlooks the new category of debtor created by the exploding lending industry. Ramsey discourages his followers not only from filing for bankruptcy but also from availing themselves of debt-settlement and consolidation packages, some of which allow for satisfying debt at 20 to 40 cents on the dollar, arguing that these packages cure the symptom not the disease. Manning points out that such compromises are, for many people, the only hope of restoring stability.

 

Manning also takes issue, as do many others, with Ramsey's position on mortgages. In Ramsey's schema, only a 15-year fixed-rate mortgage is acceptable. "I'm under no delusions that I'm going to get people to put 100 percent down on a house," Ramsey told me. "But the financial industry has made us all feel brain-dead if we don't have mortgages." In his Financial Peace video seminars, he encourages students to save as much money as possible for down payments on their homes - 50 percent, 60 percent, 70 percent. This leaves him open to the charge that his ideas are financially unsophisticated, because, as economists and money managers agree, homeownership has historically been the most common access to building wealth in America. And mortgages have the obvious advantage of reducing your tax load. But Ramsey would say that he is not against homeownership but showy aspiration and that most of us would benefit from buying homes within our means rather than above them.

 

Perhaps the biggest question surrounding Ramsey is the extent to which incautious spending can be blamed for bankruptcy. "Ramsey is absolutely right that consumer debt should not be the norm," says Deborah Thorne, a sociologist at Ohio University who served as a researcher on the Consumer Bankruptcy Project. But, she says, the project looked at 1,250 people who had filed for bankruptcy, and job loss or a decline in work hours was the No. 1 cause. Medical problems ranked second. Only 4.5 percent named credit-card debt as the sole reason for filing.

 

Ramsey argues that his philosophy is more than a defense against financial ruin. Stringent saving is, in his estimation, a proactive plan. "If I were to have a grand mission, it would be to have people prosper," he said, "it would be for the regular guy to get ahead."