Making Choices

Today I had a great comment on my $4 Gasoline post by Joy at Joy’s Victory Garden and Our Friendly Earth, that got me to pondering an issue that I have addressed here before. With the inevitable $4 gasoline, and the possibility of the rising cost not taking a downward turn anytime soon, what are average Americans going to do? Choices will be made…choices born out of fear and exasperation.

My concern with $5 gasoline is that people will have to choose between buying a gallon of milk or loaf of bread and buying a gallon of gasoline. Without fuel, people will not be able to afford to drive to work. If a person doesn’t work, then what? There are assistance programs, but I am certain it is not enough.

DH drives 36 miles round trip for work everyday. He drives an older vehicle with terrible fuel economy…but that is our only choice at the moment. Just cipherin’ in my head, I come up with a monthly expenditure of around $200 for him to drive back and forth to work. It is not proper form to tell you what percentage of his net income that actually respresents, but let’s just say….I would much rather that be going into a college savings fund instead pouring out into the environment. There is no choice for us for now, we will keep paying the amount, whatever it is, so that DH can earn his paycheck.

What about other’s who do not have other resources to offset this enormous budget buster? For a minimum wage employee, almost one hour work will pay for a gallon of gasoline. I am thinking that most minimum wage workers drive older less fuel efficient vehicles. Using the same scenario as DH’s, except on minimum wage, the percentage of net income spent on fuel is approximately 25%, a percentage that was once reserved for the most important issue of your budget…housing. Rising fuel costs added to a fixed rent figure could skyrocket to a 60-70% of a minimum wage earners net salary. So that puts us at 85-90% of salary….hmmmm….what about child care (I am thankful I do not have to worry about this expense), medical, and ummmm…let’s say FOOD? There’s another hit below the belt. Milk is as much as gasoline and bread/eggs not to far from it.

I am not an economist….and there is much I do not understand about inflation, recession, supply and demand, but one thing that I recognize with our current situation and where it is headed is that we are in deep stuff here. I think I could ramble on and on here with what ifs. It seems…and I realize that I will most likely be corrected in the comments section….that we have a full viscious cycle building larger and larger….like a thunderhead in the distance. If people are put into a position of making choices of whether to purchase gas to drive to work, or to feed a hungry family, what will that choice be and what are the ramifications of the choice? No work? No paycheck! No paycheck? No food or housing! Then what? Subsidies are available, but will they continue if a the need becomes greater? Certain jobs are filled with minimum wage workers (right or wrong) that will otherwise not be filled by anyone else. What will happen if the need for employees is not met? What if, what if?

I don’t know the answer. Do you? One thing I do know, it that I am watching the lightning strikes…..1….2….3…..and counting the moments…1…..2…..before I hear the thunder…..1……and I believe it to be a prudent time to take cover! There is a different kind of storm a-comin’!

Food Prices to Rise 9% Annually

Holy Cow! How many of us get a 9% cost of living raise each year? Not me, not anyone that I-I-I know!

Food Prices to Rise 9%

WASHINGTON (Reuters) – U.S. food prices will rise a stiff 9 percent a year through 2012, the largest increase since 1979 and the result of record-high crop prices, the head of an economic consulting company said on Thursday.

<snip>

During a telephone news conference, Lapp said he was completing a new analysis of food and commodity prices. He foresaw average corn prices of $5.25 a bushel through 2012, with wheat around $6.50 and soybeans near $11.

“When I do that analysis and look at the relationship between that and food prices, I get a 2008-12 average annual rate of increase in the consumer price index for food of 9.0 percent,” he said.

<snip>

A 50 percent increase in corn prices was likely to result in a 1 percent increase in food prices, he said in February.

Lapp said crop prices will plateau at higher levels than prevailed through 2006, due to factors that include global economic growth, geopolitical uncertainties, the weak U.S. dollar, China‘s larger role in the world economy and the use of food to produce fuel.

<snip>

“There is virtually no cushion” to offset a poor harvest, said Collins, who is now a consultant.

USDA has predicted that prices of cereals and bakery products will zoom by 8 percent this year, and that eggs and fats and oils also will go up in price. Increases are expected in 2009 for meat, poultry and fish.

Driving Mileage Down

Just found this on yahoo….

According to the Government March Driving Down for the First Time since 1979~~

….. In a sign that Americans are curbing their driving in the face of record-high gasoline prices, data released on Friday showed highway miles driven in March fell 4.3 percent from a year earlier, the first March decline since the last major oil shock in the late 1970s.

According to the Department of Transportation, Americans drove 11 billion miles less in March 2008 than a year earlier, the first time estimated travel on public roads fell in March since 1979.

The data marks the sharpest year-on-year drop for any month in the history of the agency’s reporting, which dates back to 1942.

Complete Story

FUEL PRICES!

My friend, Anita, at Prairie Dreams blogged about Gas Prices today.  The more I thought about $130 a barrel fuel…the angrier I became. I began to leave a comment, which began to turn into a pretty long comment, so I thought in all fairness to Anita I should move my overloaded mouth to my own blog.

This is an official RANT happening before your very eyes folks!  And as with most of my rants, my thoughts usually flop out on the screen in huge messy chunks…so I apologize up front for any randomness or incoherent moments.

Fuel is expected to skyrocket in June. WHAT? What the #&@! is it doing now?  I cannot imbed this video, but you can go to Chicago NBC NEWS to watch a video clip about $4.39 fuel or this clip about People Expressing Anger.  They use some of the same footage in both. $4.39 is not even the highest per gallon found in Chicago.

The Capital Group reports that Goldman Sachs predicts $200 barrel oil in 2008.

One of the videos states we should brace ourselves for a rise in prices during peak summer driving times.

How can we, the average people, make a difference in what is happening all across our nation? Some of us, out of necessity, are making individual differences in how we are surviving this crisis. On Prairie Dreams Blog, some of the comments note that people are being more conscientious about combining trips and try to cut down on unneccesary travel.

These fuel prices are not only affecting the pumps, but we see it in our grocery bills as well. I was in stunned in disbelief when 18 ct. eggs jumped over an dollar in the matter of a month. Milk at over $4 a gallon even at the large grocery chains. What can we do? Everyday people are making life decisions…do I buy milk and bread for the table or do I put fuel in the tank? There should be some law stating people should not be put in the position to make these kinds of decisions. Okay,okay, I know that there are many people who have had to make these types of decisions since the beginning of time, but come on! This is ridiculous!

I wonder what would happen if a large portion of U.S. citizens just decided NOT to go to work for one day. Now, I realize that most Americans cannot afford to miss a day of work, but there are those that are able. With the prices rising faster and higher, I feel it won’t be long before people cannot afford to drive to work and will be making that choice…do I drive to work today or do I put food on the table?

What if there was a movement toward a 4 day work week until this crisis is over? For employers who could shut down for one day a week, they would have the added benefit of cutting heating and cooling costs. We have a school district south of us who went to a 4 day school week and I have heard positive things about it. There were many obstacles to overcome in the initial transformation, but for the most part I believe it was a positive move.

I have seen email forwards asking for every person to not purchase fuel on a particular day, but that has not seemed to make a difference. I think NOT going to work for a day…..WOULD!  Maybe I am delusional…I am not economist, nor do I play one on television, but it seems there would be some relief, if not some kind of satisfaction, in a cohesive campaign. What do you think?