There's your problem right there. That is a staggering level of credit card debt. If the interest rate is around 12% (as most of them are), that is $3,000 in interest every year. So even if these people are paying $500 a month (a hefty payment for a family making less than $30,000 a year), they will spend six months a year just keeping up with the interest. It could well take decades to pay this down even if they ripped up their credit cards and vowed to never use them again. "Easy credit" is the real bane of the working class. If you get yourself into debt with credit cards, you will simply never get ahead.
As for the 401(k), I do not understand. This guy was making over $60,000 a year and "$7,000 to 8,000" is all he has to show for it? He must have been contributing a very small amount. I have been contributing at least 10% of my pay to my 401(k) since 1985 and even with the recent losses, the balance is so high I am embarrassed to even mention it here. I just hope it means something when I turn 59 1/2 and can finally make use of it.
I live in Massachusetts and while there is no doubt there are families having it tough (there always are anyhow), it is still hard getting a seat in a restaurant on a Friday night and just about all the shows are always sold out. Real estate prices are still sky high. I don't see a "bust" situation at all (even though I might get laid off next week and then I might have a different opinion!).