Definitely gift exchange. For years my mother would spend money she didn't have buying me things I didn't want. At the same time my siblings are wearing ourselves out buying for each other, spouses and kids. I finally woke up to her financial situation and put my foot down. She is allowed to buy the grandchildren 2 present each, but nothing for myself and my siblings. My brother sister and I do not exchange but we buy for the kids. She complained to her sister that her Christmas was just miserable. Aunt called me to bless me out and I replied, Really? Christmas with her entire family together enjoying the day and a great meal was miserable?
But I stood my ground. I can't enjoy Christmas knowing she is running up credit cards over it, and it's wrong to think that Christmas is about how much money you spend.
Oh, and I threw DH into this as well. Trying to buy him a gift every year was stressing me out to the point of affecting our marriage (and he apparently felt the same way) so he and I no longer exchange. Last year I bought myself a Kindle, wrapped it up and put it under the tree, and I was delighted by my thoughtfulness!