The First Step is Acknowledging the Problem

by: Dean Barker

Sat Mar 22, 2008 at 08:42:15 AM EDT
It's not if  there is a recession, but how severe (h/t DHinMI):
An analysis of government data by The Washington Post found that prices have risen 9.2 percent since 2006 for the groceries, gasoline, health care and other basics that a middle-income American family has little choice but to consume. That would cost such a family, which made $45,000 on average in 2006, an extra $972 per year, assuming it did not buy less of such items because of higher prices. For a broad range of goods on which it is easier to scrimp -- such as restaurant meals, alcoholic beverages, new cars, furniture, and clothing -- prices have risen 2.4 percent.

Wages for typical workers, meanwhile, have been rising slowly. In that same time span, average earnings for a non-managerial worker rose about 5 percent. This contradiction -- high inflation for staples, low inflation for luxuries and in wages -- helps explain why American workers felt squeezed even before the recent economic distress began.


I don't know about you, but reading this actually makes me feel better, if only in the sense that I recognize that I'm not all alone.  You see, I don't do a whole lot of discretionary spending - I'm a pretty boring consumer who focuses on the basics - food, gas, utilities.  I don't own a TV, or the cable/satellite that goes along with it, I don't use a cell phone unless I absolutely have to. I try to grow some of the food I eat. I've tried to "green" my energy wherever I can afford to. Moreover, I'm even more boring when it comes to the basic structure of my finances - traditional 30yr mortgage with no PMI and a healthy down payment, no credit card debt - something  I have been scratching together for a lifetime from beginnings in the lower middle class under Reaganomics. But now I feel like I'm rather very quickly sinking under some pretty dramatic price increases. I now regularly think about where I need to drive, and how far I can strip the cupboards before going food shopping again.

The first step to recovery is acknowledging the problem.  Please use this thread to chime in on the state of your oikonomika (household accounts, whence we get the very term economics).

Oh, and thanks for the good times, George and John E.  You can bet I'll remember it come November.

Adding: I almost forgot - home heating costs.  through a mix of design and luck, I no longer use oil or gas to heat my home, so I can't speak with as much authority on that front, but there's no question this is another monster that's doing serious damage to northern New England pocketbooks.
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