Meet Dave Ramsey, the most important personal finance guru in America. Millions of people follow his biblically inspired advice. It goes like this: 1. Purge yourself of debt; 2. Live on cash; 3. Pretend economic trends don't affect you; 4. Blame yourself when they do.

Dave Ramsey. (PHOTO: JACKSON LAIZURE/GETTY IMAGES)

For a long time Tannie and Kenneth Ackley had more bills than they could keep track of. There was a debt to Sears and another to Home Depot. There were medical bills, including a couple thousand dollars’ worth from Kenneth’s surgery to fix a heart defect a couple of years back. And there were the boat and the camper, which the Ackleys sold off to pay other bills they can barely remember, only to see new ones crop up in their place. All told, excluding student loans and their home mortgage, the Ackleys owed somewhere between $20,000 and $30,000—$50,000 “if you count the truck,” Tannie told me one balmy Sunday afternoon this April in East Texas.

I met the Ackleys while sitting beside them in a cavernous megachurch just off I-45 outside Houston. Tannie is a brown-haired clerical worker with an easy smile; Kenneth is a construction-equipment operator with a handlebar mustache. Along with about 5,600 other souls, we had flocked to the church to spend four hours getting financial religion from the man Kenneth and Tannie credit with setting them on the straight and narrow path out of debt. His name is Dave Ramsey, and he is the most important personal finance guru in America.

Walking on stage, Ramsey received a standing ovation before saying a word. A balding, energetic man with close-cropped hair around his temples, wire-framed glasses, and a neatly trimmed gray goatee, he wore jeans with a bright blue shirt and a dark gray blazer. If there were such a style, Ramsey’s could be described as “meticulous casual.” Even his accent, with its radio-friendly Nashville burr, conveys a perfectly calibrated mix of folksiness and authority. “I’m not here to get your money,” he said to an audience of people who had paid $39 a ticket. “I am here to change your life.”

To his listeners, Ramsey holds out the promise that they can simply choose to be different—that it's within their power to not take part in recessions and the economic problems facing American families. "Debt is normal," a Ramsey bumper sticker says. "Be weird."

If you don’t listen to talk radio, attend an evangelical church, live in the South, or watch Fox News, there is a decent chance you’ve never heard of Dave Ramsey. If somebody asked you to name a famous personal finance guru, you might come up with Suze Orman, the ubiquitous talk show host, author, columnist, and speaker. Her main platform for reaching an audience is her Saturday night CBNC program, which is viewed by about 300,000 people.

Ramsey puts Orman in the shade. Every week, at least six million people tune in to The Dave Ramsey Show on the radio. The program, which is wholly owned by Ramsey’s private company, the Lampo Group, airs on more than 500 stations. It has been called the “most listened to non-political talk radio show” in America. Then there are Ramsey’s frequent stage shows, which he delivers to audiences of thousands in stadiums and megachurches like the one in Texas. And finally there’s Ramsey’s Financial Peace University, a hugely popular video-based course that lays out his trademark, biblically inspired approach to debt and money in nine facilitated sessions. It convenes in weekly meetings at evangelical churches and on military bases across the country. There’s also the occasional series run at a hospital or jail.

So what does Ramsey have to say to these millions of people? On the subject of debt, his advice can be summed up in one word: abstinence. Just say no, Ramsey says, to credit cards. No to student loans. No to anything you cannot afford with cash, with the exception of a fixed-rate 15-year home mortgage. Lenders, he says, are a scourge on the American public, and borrowers are their slaves. “Debt has so sunk its claws into our culture, we believe we are here to work, play, make payments, and die,” he told his rapt audience in Houston. “It’s a life of desperation. You feel like a gerbil in a wheel. We borrow ... then everything hits the wall: the marriage, the kids. It’s a NASCAR car crash.”

At this, the Texas crowd erupted in cheers. And it’s easy to understand why. Like the Ackleys, the audience members are mostly white, over the age of 35, and apparently middle class (in the way we generally assume people who aren’t obviously destitute to be middle class). They belong to a generation battered by lousy household economics. Adjusted for inflation, median household income in America fell by seven percent between 1999 and 2010. At the same time, the costs of child rearing, health care, education, and housing continued their decades-long climb. In 2012 alone, the average family’s medical bills went up by 7.2 percent. And the deflated housing bubble hasn’t stopped rents from climbing—in Houston, they’re at a record high. The rest of the story is familiar, and accounts for all the cheers at the megachurch: To make up for this shortfall between our salaries and our bills, we have borrowed, and borrowed, and borrowed. And we have paid for it.

Anger at predatory lenders and disgust with the indentured servitude of debt have been a huge part of America’s public consciousness since the financial crisis of 2008. They have fired the politics of Occupy Wall Street and the careers of financial reformers like Elizabeth Warren, who are calling for greater financial regulation, a stronger safety net, and efforts to reverse decades of increasing wealth inequality.

Ramsey takes the disgust with debt in a different direction. In his version of the story, the wider economy’s problems are not structural or political, but instead stem from the fact that most people, including his listeners, are weak-willed, self-indulgent, and stupid (he doesn’t shy from the word) when it comes to spending. “The problem with your money,” he often says with perfect certainty, “is the person in your mirror.” Once you get over the casual meanness of this message, it becomes clear how oddly reassuring it is. It assumes that we are in control. To his listeners, Ramsey holds out the promise that they can simply choose to be different—that it’s within their power to not take part in recessions and the economic troubles facing American families. “Debt is normal,” a Ramsey bumper sticker says. “Be weird.”

Ramsey holds himself up as a special example of this weirdness. In late 2009, he appeared on Glenn Beck’s Fox TV show to talk about the financial crisis. “This time last year, the whole world was coming to an end, remember? And I strangely felt like a spectator,” Ramsey said. “My home’s paid for, I’ve got a pile of money in the bank—not because I’m some rich guy on TV or something, but just because I’ve worked a system to take control of me and mine: It’s called personal responsibility.” This is Ramsey’s self-help proposition: If you can only impose discipline on yourself, wealth will follow. Purge yourself of debt through self-mastery, and you will enter a life of prosperity and 12 percent annual returns in the stock market (with the help of Ramsey’s endorsed network of financial advisers).

It’s an alluring message. Ever since the Ackleys discovered Ramsey four or five years ago, they have been slowly, methodically, and painfully paying down their bills while refusing to take on new debts. “Like Dave says, the borrower is the slave of the lender,” Kenneth told me as we chatted during a break in Ramsey’s four-hour program. Of course, it’s generally good to get out of debt. But when it comes to financial salvation, Ramsey’s gospel is one of extreme self-reliance, bordering on self-mortification. He preaches the need for what he calls “gazelle intensity” in getting control of one’s money. The phrase is a reference to Proverbs 6:4-5: “Give no sleep to your eyes, nor slumber to your eyelids. Deliver yourself like a gazelle from the hand of the hunter.” In Ramsey’s world, there is always fat that can be trimmed from a family’s budget, always another job that can be scraped together to add to a family’s income. And no bailouts: In all but the most extreme cases, Ramsey abjures bankruptcy—the one legal avenue Americans have for debt forgiveness.

What he offers, in return, is hope through sacrifice—and, again, a sense of control. “It’s nice to see there is a way out,” Tannie confided in me before Ramsey’s stage show resumed. But is that really what Ramsey’s harsh gospel offers: a way out? Does his system work? Data is scarce either way, but there’s little evidence that his advice works for people who are truly struggling—or that his worldview accurately describes their problems. His counsel even wards them away from a source of relief he himself once depended on: Before making his fortune as a self-help guru, Ramsey completed his own journey out of crushing debt by filing for bankruptcy in 1988. For anyone who’s similarly overwhelmed, Ramsey’s advice may hurt more than it helps. Whatever the case may be, one thing’s for sure: The age of debt has been very good to Dave Ramsey.

Members of Ramsey's audience renounced these credit cards and sent them to Ramsey's headquarters. Ramsey's mantra: "The borrower is the slave of the lender." (PHOTO: AP PHOTO/JOSH ANDERSON)

THERE'S PROBABLY NO BETTER way to learn about the financial lives of individual Americans than to spend a few hours listening to The Dave Ramsey Show, which airs in every major media market in the United States. For three hours each weekday, 15 hours a week, caller after caller rings up to receive counsel from Ramsey, 53, on their battles with and over money. Southern accents predominate, but calls originate everywhere from New York to the Pacific Northwest.

Listen long enough and you realize you are hearing the raw, unfiltered tragedy of the economic plagues facing 21st-century America. There is melodrama aplenty: fights with relatives over family businesses, siblings squabbling over inheritances. But the majority of calls have something do with debt, job loss, or broken families. There’s Stuart in North Carolina, who just got laid off, leaving him and his wife “a couple of grand” in the hole every month. There’s Talyn in Kalamazoo, whose dad has come out of retirement twice to make ends meet. He’s working with a foot injury and not taking care of his health the way he should because his current job requires him to be on his feet. Talyn calls him “financially irresponsible” and senses that she might need to bail him out. “I can kind of see stress coming in the future,” she says. Ramsey’s take: The foot injury and financial trouble are Talyn’s father’s responsibility. “Don’t get sucked into this,” Ramsey tells her as the music announcing an upcoming break begins to play. “There’s no end to it. There’s absolutely no end to it.”

Nick in New London, Connecticut, phones in to ask, sheepishly, for Ramsey’s blessing: He wants to take a break from paying down his debts so he can send his son to a pricey college while minimizing the family’s student loans. “You and your son might not like me, but I am going to tell you you are absolutely insane if you put him in that school,” Ramsey proclaims. “You cannot afford $42,000 a year. You are broke. You need to choose a different school.” Ramsey calls the college loan crisis at least in part a “parenting problem” caused by moms and dads who can’t say no, and he is forever telling people to look at state schools. That the cost of attending public universities has itself increased by more than 25 percent over the past five years, rendering them increasingly unaffordable as well, doesn’t seem to figure into his analysis.

In the quagmire of today’s economy, Ramsey offers moral clarity: If you work hard, you can make it. If you are lazy, you won’t. Though he appears on secular media outlets like Fox, Ramsey’s public persona owes much to a Southern Christian archetype: the wry, plainspoken pastor who doles out tough love. He’s often telling callers to get second jobs, to drive “beater” cars, and to survive on rice and beans. He describes his advice as wisdom that comes from “God and Grandma.” He exhorts people to “act your wage,” and he frequently refers to financially wrongheaded folk as “goobers”—a term that, in true Southern style, manages to be both a term of endearment and an insult.

More specifically, when it comes to getting out of debt, Ramsey’s got a plan. It’s called the Seven Baby Steps. Step one directs users to build up a $1,000 emergency fund. Step two is called the Debt Snowball: To eliminate a mountain of debt, Ramsey advises, listeners should start by methodically paying down their bills from the smallest to the largest. Another step directs people to start putting 15 percent of their income aside for retirement; the final step calls on people to “Build wealth and give!”

Ramsey has said that the story of rising income inequality in America—a story backed up by reams of data—is "not really true." The very trend that's contributed to the massive growth of his financial empire is, in his view, so much fiction.

But it’s the second step—the journey out of debt—that is the real heart of the program. The culmination of that journey, in the form of something called “the Debt Free Scream,” is The Dave Ramsey Show’s signature recurring feature. When a family has paid down its bills—whether in arrears by $1,000 or $100,000—mom, dad, and the kids are encouraged to drop by the studio or phone in to recount the tale. “You must have eaten a lot of rice and beans,” Ramsey might say approvingly. Then the family screams, “We’re debt-free!” into the telephone or studio mic. It’s joyous. It’s celebratory. Everyone in the Ramsey universe wants to work through the Debt Snowball and unleash the Debt Free Scream.

But there are problems with Ramsey’s method. In 2011, a group of researchers, including the star behavioral economist Dan Ariely, published a paper in the Journal of Marketing Research that raised questions about Ramsey’s gospel. The researchers performed a study to find out how people, when left to their own devices, decide which loans to tackle first when paying down their obligations. The scholars’ finding: “Rather than repaying the debts with the highest interest rates more quickly (the financially optimal strategy), many consumers chose to repay the smallest debts as soon as possible.” In other words, people don’t need Dave Ramsey to tell them to tackle their smallest loans first; that’s where their biases guide them already. “Ramsey may be preaching to the choir,” the paper dryly noted.

This wouldn’t be any trouble were it not for the fact that the Debt Snowball has the potential to cost people a lot of money. The problem is one of interest rates. Let’s say you have two major debts: a $5,000 bill charging 10 percent interest and a $6,000 bill at 20 percent interest. Imagine you can only pay them down by a few hundred dollars every month. Following Ramsey’s advice to pay down the smaller bill first would lead to a significantly larger long-term tab.

Ramsey, to his credit, does not skirt this issue. He has always acknowledged that tackling the largest interest rate is the more cost-effective policy. But he argues that it’s more important for people to start feeling positive feedback by closing accounts. “You need some quick wins in order to stay pumped enough to get out of debt completely,” he writes on his website.

A different study, this one published last year by two professors at Northwestern University’s Kellogg School of Management, offers Ramsey some vindication on this count. By looking at data collected by a debt settlement firm on the behavior of 6,000 borrowers, the authors found that people who closed debt accounts—no matter their amount—were more likely to eliminate all their debt. Cost-effective or not, “small victories” are motivating.

Neither of these studies, however, answers the most important question: Do Ramsey’s success stories stay out of debt? Ramsey’s organization, which is short on data, relies on the testimony of people who say they’ve become debt-free as proof of the program’s success. But becoming debt-free is no guarantee of staying that way.

I’ve been reporting on Ramsey on and off since 2010, when I decided to include him in my book Pound Foolish: Exposing the Dark Side of the Personal Finance Industry. I’ve spoken with several dozen Ramsey fans since then. Some people I’ve met have gotten out of major debt and stayed out, but often they have some kind of leg up: an inheritance, or six-figure household income. Many remain in debt, just less of it than before. Others claw their way out and then find themselves in arrears again, like Tamara, a Florida mom of five children under the age of 14 I chatted with earlier this year. Tamara, who asked that I not use her last name, said it’s the cost of fairly basic extracurricular activities for her kids that’s driven her back into the red. “It’s not that we are buying them designer clothes,” she says. “It’s that we want them to do sports.”

Often it’s even more basic expenses that create the undertow. “The structural stuff swamps them in the end,” says Rebecca Barrett-Fox, a visiting professor of sociology at Arkansas State University who is studying Ramsey’s work. “One person I spoke with said they were doing well 'til their health insurance bill went up by $100 a month, or $1,200 a year. The first year they didn’t go on vacation. But the second year there was no more vacation to not go on.”

Economic volatility is an overwhelming fact for millions of Americans; willpower is finite; and gazelle intensity takes its toll. “Ramsey never talks about the cost of [his strategies],” Barrett-Fox continues. “He does not have good advice for people who have low incomes and are against the wall. If they lose a job, he doesn’t really have anything for those folks.”

(PHOTO: WESLEY FRYER)

LIKE MANY GURUS, RAMSEY'S own narrative involves a tale of early downfall and redemption. His story begins during the real estate boom of the 1980s. As a young entrepreneur fresh out of college, he convinced a local Tennessee bank to loan him money so he could build up a real estate empire. But Ramsey’s properties were financed via short-term loans and lines of credit. The bank called in all the debts, and his $4 million real estate portfolio collapsed. Lawsuits and foreclosures ensued.

Ramsey hit rock bottom in 1988, when he and his wife, Sharon, his college sweetheart, declared bankruptcy. Desperate, he turned to the Bible, where he saw wisdom in Proverbs 22:7. A portion of that verse is his mantra to this day: “The borrower is the slave of the lender.” (The first part of the verse—“The rich rule over the poor”—is less prominently featured in his messaging.)

Ramsey resolved never to borrow another dime again, and to stop as many other people as he could from going down the road of debt and bankruptcy. He self-published a book called Financial Peace, which he began selling out of the trunk of his car. To further his mission, he and a friend offered to do a one-hour daily radio show called The Money Game for a local radio station at no charge. In 1994 he started offering seminars. By 1997, he was being profiled by People magazine and featured on The Today Show.

Ramsey’s biography is a key part of his message: He begins his live shows by telling the saga, and he portrays it as both a cautionary tale and a representative parable—a kind of prodigal son story. But this portrayal conveys a fundamental misunderstanding of how most Americans land in financial trouble. Ramsey was a risk-prone real estate developer who went bankrupt because he attempted to leverage borrowed money into riches and failed. He didn’t hit financial bottom because he was fired, or because he was stuck with a high-deductible, low-benefit insurance policy when his child got sick.

Contrary to popular myth, the United States bankruptcy courts are not filled with people looking to get out of paying for 65-inch flat screen televisions and designer linens. According to work published by a group of professors at Harvard University, including now-Senator Elizabeth Warren, bills related to medical care have long been the primary driver of bankruptcies. Other leading causes are job loss and divorce. And of course today’s economy presents its own unique hazards: According to Zillow.com, 23.8 percent of homes with mortgages are underwater. Unemployment remains high; the workforce participation rate for men is at post-war lows.

If you talk to personal finance and bankruptcy experts, you’ll discover they believe many people wait too long to declare bankruptcy, and cause themselves unnecessary financial harm in the process. “What happens is they take money that would be protected [in a bankruptcy filing], like home equity or retirement accounts, and keep throwing it at unpayable bills,” personal finance columnist Liz Weston told me.

“Bankruptcy, despite what you hear in the popular press, is still very stigmatized,” says Pamela Foohey, a visiting professor at the University of Illinois’ College of Law. “You don’t want to believe you are a financial failure.” People are looking for ways to avoid declaring it, even if it’s clearly the best course.

Ramsey did not agree to sit for an interview for this article. However, he told the crowd in Houston that he considered his bankruptcy an emotional scar and a painful experience he’d like to help them avoid. “It is not because I filed for bankruptcy that I succeeded. It is because of what I learned when I failed. That’s why I succeeded.”

But contra Ramsey, many people who declare bankruptcy find it a huge relief—including scores of his own followers. The page on his website where he lays out his position on bankruptcy has become a kind of bulletin board for people who have filed and feel it was the right choice. The comments section is bursting with their stories. “The decision to file bankruptcy was agonizing but once it was done I felt a huge weight lifted,” writes Bronte, a middle-aged widow. “I needed to get on with my life and raise my children without fear, worry, or struggle.” “I always lived within my means,” comments John. “That didn’t matter when I got in an auto accident without health insurance. I got socked with about $100K of medical bills. I had the option of spending the next 20 years living in poverty to pay it off or filing Chapter 7.” Some of the posters plead with Ramsey to amend his advice. Says Sue, who has been unemployed for more than two years: “Dave needs to give more consideration to things that happen in life, such as unemployment and illness, that push people into bankruptcy and not be so condemning.”

Just say no, Ramsey says, to credit cards. No to student loans. No to anything you cannot afford with cash, with the exception of a 15-year home mortgage. Lenders, he says, are a scourge on the American public, and borrowers are their slaves: "Debt has so sunk its claws into our culture, we believe we are here to work, play, make payments, and die."

TWENTY YEARS AFTER ITS beginnings in the back of Ramsey’s car, the Lampo Group is now a behemoth, with more than 350 employees and numerous product lines and offerings. The company is privately held, so it is impossible to know how much Ramsey has earned over the years, but it’s almost certainly at least in the tens of millions of dollars.

Consider Ramsey’s radio show: The program is self-syndicated, meaning that Ramsey both controls the content and receives a decent portion of the advertising revenues. This is a highly unusual—and profitable—arrangement. According to Bill Figenshu, a radio industry consultant, stations that agree to run the show receive it for free. In return, Ramsey is given a number of ad spots—probably around five minutes’ worth every hour. As a top ratings draw, Ramsey likely commands about $6,000 per minute of airtime, resulting in $90,000 in revenue for a three-hour show. That’s $450,000 a week, or $23.4 million annually.

Financial Peace University is likely a major revenue generator as well. Lampo claims more than two million families have taken the class, which currently costs around $100 for its nine sessions. The business model is superb. The Lampo Group grants permission to the churches, hospitals, and whomever else wishes to run the Financial Peace nine-video series. But either the venue or the participants pay Lampo directly, so profit accrues to Ramsey’s organization. Venues are responsible for not only promoting and marketing their specific class, but also finding a volunteer to facilitate the sessions. Lampo does provide sample scripts for pastors to use in pitching Financial Peace to their congregations. “I would like each and every one of you to open your hearts ... and your wallets,” reads one. Another: “Seriously folks, you can’t afford not to take this class.”

Still another source of revenue is Ramsey’s network of “endorsed local providers,” who offer investment advice. These are the professionals who Ramsey has claimed over the years can help people realize 12 percent average annual returns in the markets, leading to more than a $1 million portfolio by retirement. Such claims were common currency among financial gurus during the Internet bubble, but Ramsey stands out in 2013 by refusing to downscale his optimistic projections. It’s “a blatant form of false hope,” Brian Stoffel recently wrote on the investment site the Motley Fool. Similar controversies over the 12-percent claim blow up every few years. Ramsey insists that the number could be accurate, but that he’s not technically promising these returns; and even if he’s wrong, the high number is motivating—it encourages people to save. What’s certain is that Ramsey’s organization gets a cut: The endorsed local providers are identified in the fine print of his website as having an “advertising” agreement with Lampo—which means they pay him to talk them up on his radio show.

There are other products as well: Dave Ramsey’s Custom College Guide offers financial comparisons of up to six different schools and assists with financial aid applications—for $139.99 (it’s currently on special for $99). A program called Momentum offers financial counseling to churches. Generation Change, headed up by Ramsey’s daughter Rachel Cruze, markets a line of videos, books, and other products tailored to teens. The Lampo Group is also expanding into the burgeoning Latino market, broadcasting a Spanish version of Ramsey’s popular radio program, which now airs on just under two dozen stations around the United States.

This fall, Ramsey added a new video class, The Legacy Journey, which focuses on life after debt—when, as the accompanying workbook puts it, “you’re looking at a future filled with hope and excitement instead of fear and doubt.” Lampo is charging $109 for seven sessions. Ramsey is spending the fall promoting the new class with four live shows in Oklahoma, Washington State, South Carolina, and Newark, New Jersey, right outside New York City. Perhaps looking to his own legacy, he’s also beginning to promote other members of his organization, including his daughter Cruze and the career guru Jon Acuff, so that they can headline some live shows in his stead.*

All of this has made Ramsey a very wealthy man—a fact that has at times become a touchy subject with portions of his financially distressed audience. As the world economy was imploding in 2008, Dave Ramsey went shopping for a new home. According to published reports, Ramsey paid a little more than $1.5 million for several acres of land in Franklin, Tennessee, and then constructed a 13,000-plus-square-foot residence (the garage is another 1,450 square feet). After completion, it was valued at just under $5 million. More than a few evangelicals thought Ramsey was flaunting his wealth, and took to the blogosphere to say so.

The attention seems to have gotten under Ramsey’s skin. “No one was mad at me when I sold 10 books and made $10,” he said during his Houston show. “Wait 'til you sell 10 million—you’ll be attacked like you wouldn’t believe.” He laments that “winning is no longer OK” in our culture. In Houston—at the main show, at private gatherings for Financial Peace University instructors, and again in a sermon he gave at the megachurch on a Sunday morning—Ramsey inveighed against people who criticize millionaires and billionaires for driving fancy cars; he asserted that such wealthy citizens are probably giving huge amounts to charity.

Not surprisingly, Ramsey’s political views—which are often vividly on display during his radio show and in his public appearances—are quite conservative. He argues that estate taxes are “immoral” and a sign of incipient socialism. So too is Obamacare, which will damage the American economy. Social Security is “running out of money fast” and “mathematically doomed.” And he believes the federal government, like any household he advises, needs to say “no” to things it can’t afford, balance its budget, and stop borrowing money. (Needless to say, he’s generally not in favor of raising taxes either.)

What’s more, Ramsey has said that the story of rising income inequality in America—a story backed up by reams of data—is “not really true.” The very trend that’s contributed to the massive growth of his financial empire is, in his view, so much fiction.

In America, the economic fortunes of ordinary people like those in Ramsey’s audience are stagnating, while the fruits of increased productivity and profits are accruing to the wealthiest among us, including Ramsey himself, at an accelerating rate. But Ramsey seems to think that concern over inequality just comes down to bitterness. “This idea that it is all going to be fair—it’s a message Satan is using in our land right now: People who are wealthy must have done something bad,” he said in his Sunday sermon in Houston. “It’s the spirit of poverty.” He went on: “If you are living in a spirit of poverty, any car that is nicer than yours is too nice.”

“Dave Ramsey is part of the culture of rising economic disparity,” says the sociologist Barrett-Fox. “We want to blame the poor. He is there to affirm a popular perception.”

Dave Ramsey's daily broadcast on personal finance has been called the "most listened to non-political talk radio show" in America. (PHOTO: AP PHOTO/JOSH ANDERSON)

THERE ARE TWO THEORIES of self-help and its ultimate impact. The first is that its prime directive is to motivate people. As the Fordham University sociologist Micki McGee, the author of Self-Help, Inc., once told me, the power that financial gurus like Suze Orman and Ramsey have “comes from reinforcing the American ideology of individualism.” By telling people they have more power than they really do, these gurus motivate them to take what action they can.

The other view—and mind you, this is not a contradiction—is that the self-help industry, by insisting on the ultimate power of the individual, leads people to believe that they are to blame for failures that are more truthfully the result of political, economic, and social trends.

A week after I went to Houston, I found myself at a Sunday morning Financial Peace University class at an evangelical church located in Manhattan’s rapidly gentrifying Lower East Side neighborhood. It was the final session of the class, and the 19 people in the room were eager to talk about their victories. One woman proudly mentioned that she cancelled a vacation to Florida this summer so she could save up to buy a house. A man told the room how he cut up a credit card.

Giving up a vacation is fine, but I was left wondering how much it would really accomplish. Many in that room have tens of thousands of dollars in student debt. Their jobs seem to come and go. Their children are a financial burden, whether they are toddlers or adults with their own money woes. I was seated next to Elizabeth Lavergne-Rivera, 43. She’s lived in this neighborhood most of her life—first in the projects, and now in subsidized housing. She’s been married 17 years, has two tween children, and has been in and out of the workforce, having taken time off to nurse her now-deceased dad through Alzheimer’s and handle health issues on her own.

Financial Peace, she told me, has been helpful, reminding her to not eat out so often and be mindful of her spending. Yet when I asked about her bills, she sighed. Her husband owes $86,000 in student loans. Right now, they are paying off $500 a month, a sum equal to her monthly grocery bill. Lavergne-Rivera is unemployed, once again looking for work. So what, I ask, did she get out of the class? “A budget—and, I think, hope.”

I am reminded of Tannie Ackley’s remark about what Ramsey offered: a way out. Ramsey appeals to people in financial trouble by offering what appears to be an easy-to-follow path to fiscal sanity and prosperity. If we can exercise self-control over our wallets, he says, the rest will take care of itself. But for all too many people in the United States of 2013, that’s not really true. Larger forces overwhelm their best efforts. And the sooner we admit that, the faster we can begin to address the real causes of our personal finance woes.

*UPDATE 10/30/2013: After this article went to press, Jon Acuff resigned from the Lampo Group and is no longer working with Dave Ramsey.