My original comment was not meant to imply I don't believe that there are tangible effects on people (most notably unemployment, which is certainly up compared to a few years ago).
All I said was that media and politicians largely made it up.  I think it is a self-fulfilling prophesy to an extent, where in people hear constant messages that times are tight, therefor they cut back on consumption, therefor retail markets fall, therefor manufacturers cut back, and employers start laying people off.  Which fuels the beginning of the cycle even more.  This is why business analysts track "consumer confidence".  In fact, to a large extent it is what the stock market is all about.  Its less a question of how well a company is doing and more one of how popular are they.  If people think its doing well, they buy, which itself drives the stock price up.  It works both ways, so if everyone is convinced the market is doing bad, they sell so they don't lose too much by waiting, and then companies don't have the capital to invest.

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I think it is totally unreasonable to adjust what it means to be "poor" based on those around you.
If we did that, billionaires could claim to be poor if those around them are multi billionaires.  In fact, everyone except for the single richest person in the world would be "poor".
Clearly there should be some objective standard of poverty.
I think the only reasonable one is the point at which you have a reasonable fear of not being able to provide the basic necessities for oneself and family.  Food, shelter, clean water.  If you can afford so little food that it affects your health, you can claim to be poor.

It doesn't have to be a "big" car.  If you own a car, you aren't poor.  Period.  Never mind that most people in the world couldn't even afford the up-front purchase price of a car.  Much higher than that in the long run is costs for fuel, insurance, parking and tolls, maintenance, tickets...
For hundreds of thousands of years of human existence even the wealthiest people in the world could not buy cars.
Only in the US do people honestly believe that they are a "necessity".
All over the country people claim to be struggling who are paying for cable TV.  They eat out and buy $2 cups of coffee.  They have cell phones and internet connections.  These are things most people and the world can't afford.  They are not basic necessities.

Supposedly a person in the bay area needs 3 times the federal poverty level in order to live "comfortably"
http://articles.latimes.com/2007/oct/17/business/fi-wages17
http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/10/17/MN0ISQEFP.DTL

They take it for granted that everyone needs a car.
And since when does every 6 year old need her own room?!
In the case of the 2nd article, I have no contempt for the person they profile.  She (rightly) considers herself middle class.
(Hopefully, after having been interviewed she doesn't change her own standards).
Now, going into collection, obviously a problem.  Thing is, that is another of those uniquely American things: living beyond your means.

[Due to charcter limit, this essay is continued here: http://neapolitanblog.blogspot.com/2009/09/spoiled-economic-downturn-luxury-as.html ]