Food and gas prices and the survival of the American middle Class

Please read the article below before reading this. The article describes well the decline in American’s middle class. Many things mentioned remind me of the first years after the 2001 economic collapse, how people slowly change their habits, how certain things once taken for granted are little by little out of your economic possibilities.

Something that will have a huge impact the average American’s life will be the inflation combined with the typical American distribution that took for granted that everyone would both have a car and be able to afford fuel for it. 

You already hear about people not being able to do that and now going back to using public transportation. In some cases they simple don’t each where you’re going or multiple buses are required. Here in Argentina, since we already had a large percentage of poverty to being with, the public transportation system was in constant exercise so that makes things easier when that user group grows. When you don’t ever have such system in effect because there was no need to satisfy, you have to start from zero. Very likely, little by little more bus lines will be created to deal with the new demands. From an Urban point of view, in most of south America its already expected of you to walk, specially for close distances. This means a) stores are placed close to neighborhoods b) The infrastructure is there for you to walk form one place to another. It was surprising for me to realize that in some Texas cities you simply couldn’t walk from point a to point be, even if point b was 4 blocks away, you just had to take a car. Unthinkable not only for 3^rd world countries, but also for modern architecture being implemented in today’s first world countries as well. As inflation and gas prices convert more middle class into poor, people will have no other option but to walk more, and the future urbanizations will have to keep this in mind as well in spite of previous cultural traditions. Cars that make inefficient use of fuel, even the food (and their ever increasing prices) will slowly change the what was considered typical. You buy a car now keeping in mind how much fuel it uses, you plan your meals and dinners based on what type of food your budget allows you to buy. The article mentions using wood for heating, but soon enough people will notice that smaller houses are cheaper and easier to heat: No more extra rooms you don’t need, or ridiculously large spaces that aren’t being used.

Suddenly the “retreat”, supposedly the solution to every possible survival need has this huge disadvantage: unaffordable gas prices. How’s that for living ½ a gas tank away from the nearest town? And the crime problem such isolation comes along way hasn’t made itself as evident as it should for a very simple reason: Things just aren’t that bad yet. Many hard lessons will be learned if they do. Many of this perfect survival solutions have worked well so far because they haven’t been put to any real test. Unfortunately that changing and some hard lessons are being learned.

 Things will have to become more efficient because the average budget just wont allow it any other way.

Take care folks.

FerFAL

Gas, food prices double whammy for rural families

http://www.kentucky.com/2011/03/21/1679468/gas-food-prices-double-whammy.html

By MATT VOLZ — Associated Press

Posted: 5:26am on Mar 21, 2011; Modified: 5:30am on Mar 21, 2011

HELENA, Mont. — Twice a week, Myriam Garcia puts snow chains on her 22-year-old gas guzzler and noses two miles down the hill from her trailer in rural western Montana. Then, instead of turning south and driving the 45 miles to Helena for grocery shopping like she used to, she parks on the side of the road and waits for a friend or neighbor heading into town to give her a lift.
In Helena, Jackie Merenz loads her beat-up SUV with juice boxes, graham crackers and apple sauce she bought at Walmart for her 6-year-old daughter's birthday party. The 60-mile round trip she makes twice a week for groceries hits her wallet hard - the food stamps don't go far, gas prices are skyrocketing and to top it off, her husband had to stop working after getting injured.
Living out in Montana's Big Sky Country often means driving long distances for the basic necessities, and people on tight budgets like Garcia, 49, and Merenz, 26, have long been creative in making ends meet.
But with food prices up nearly 4 percent last month - the biggest leap in 36 years - and the national average for a gallon of gas at a whopping $3.57, this economic double-whammy is stretching family budgets to the breaking point.
"It took me $50 to fill up my car yesterday. And it will be gone in three days, probably," Merenz said. "We already live in HUD housing, we're already on Medicaid, we already have food stamps - and we still struggle."
Merenz and her husband Richard moved to a small house in Boulder, Mont., two years ago after he had sinus surgery and the doctor told him the Oklahoma humidity was not good for him. He got a job at the Montana Developmental Center, which caters to people with developmental disabilities and behavioral problems.
But then in December, a patient broke his nose, knocking Richard Merenz out of work and leaving him in need of two operations. It couldn't have come at a worse time, with the rising prices of milk and baby food for their three children ages 6, 2 and 8 months.
"Right now, we're just kind of winging it," Jackie Merenz said.
Merenz, balancing 2-year-old son Taylor on her hip as she loads the last boxes of Capri-Sun, said she's had to pay $200 more a month in groceries the last couple of months - on top of the food stamps she uses. Her daughter Andrea's birthday party will be simple, featuring pin-the-tail-on-the-donkey with her kindergarten friends.
About 75 miles north of the Merenzes, Garcia lives on 20 acres of pristine country near Craig. She's lived there for 12 years in a trailer that's off the electrical grid, raising chickens and three sons. The children are now grown. Garcia is disabled and receives Social Security payments.
Now gas prices have forced her frugality to an extreme. She runs her generator three hours a day, flipping it on to watch the news at 5 p.m. and for chores afterward. Sometimes the choice comes down to paying for fuel for her home and car or buying food.
"Before, I had three boys so I was always creative with a limited amount of funds. Now I have to be even more creative because gas is so high," Garcia said.
She uses a wood stove and a propane heater for warmth and takes housesitting jobs in Helena whenever she can to cut down on expenses.
"That is a big, big help. Especially in the wintertime. I get to eat, I get to do laundry and there's no expenditure on gas once I get there," she said. "It is kind of a nice little break where you have electricity at the flick of a button and you don't have to arrange your day around electricity and gas."
When she's back home and has to make the twice-weekly journey into town, she tries to avoid driving the long stretch of highway into Helena by carpooling whenever she can. She'll arrange rides with friends and neighbors, splitting the cost of gas.
"I can't really afford to drive to town. If I can drive into town once a month, I'm lucky," she said. "A lot of time people from Craig are leaving for town and I'll catch a ride with them. But I'm too scared to get in with strangers."
She's holding out for summer, when her garden will yield fresh vegetables and her chickens start laying again, giving her some relief from rising prices. But she is convinced the cost of gas and food will only keep going up, and she is preparing for even more frugal measures.
Garcia said she'd like to see the nation's lawmakers take a page from Lee Iacocca, who took an annual salary of just $1 when he set about turning around Chrysler in the 1980s. Politicians should do the same now to help turn around the U.S., Garcia said, and funnel the salary they forego back into Medicare and food and services for children.
"I'd like to see them step up. They already have income, they're already very wealthy - many of them are," she said. "Our country's in trouble. It wouldn't be forever. But it would give me faith and hope because I love America."