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Blogs by Wendi L Richards
Economy 6/25/2008 3:57:29 AM
A commentary on the economy. Is this a Depression? Prices for the essentials are sky high. Will this cause us to live like Europeans? I heard it announced that DOW will be increasing the prices of their products another 25% after the 20% increase they have already enacted. The loaves of bread at the supermarket look like bread bowls and the cereal boxes are slimming down, even thought the price is just as high.
I think we are past a recession and into a depression, even though no one wants to say that word aloud. I have never seen prices this bad. In Maine the lanes are bordered with "For Sale" signs. People are moving to warmer climates, because they can't afford the price of heating oil.
Last year, the choice of food vs. heat in Maine made the news. This year, it will be worse. Families, like mine are looking for alternative heat sources. The day we purchased our pellet stove, the owner of the store said he had 15 people in the tiny store that morning and he felt like he was teaching a class.
About 5 years ago, my family dropped to one teacher's income, plus change. We had gone from two incomes and no kids, to one income and two kids. We kept track of every penny and did our best to make cuts. Now, we have to re-analyze again and see where we can make further cuts.
The typical American family has a lot of "pork" in their spending. Articles talk about "latte" funds, saving the money you usually spend on buying fancy coffee. Living economically is not something the typical American family does.
Look at the cost of weddings and children's birthday parties. They have become a show of wealth. But what will happen now? What will happen at Christmas, when many stores have the bulk of their sales? What about all the specialty and gift shops? Will the stores not caring necessities be able to survive, when everyone has to set their priorities?
Our economy may well mimic Europe's, where people don't have big screen TVs and other status gadgets. A typical European family does not have multiple vehicles, TVs, computers, ipods, cell phones, etc. They have not had the excess income that we have enjoyed. Some of the poorest Americans still have more "toys" than the typical European and much much more than the majority of the world.
We are just starting to make the hard choices. What will you do with the money you have left after paying for the essentials? Will there be any money left?
