It’s not just a problem here in Nassau and Suffolk counties on Long Island, NY. All across the country, Americans are feeling the strain of an economy that is attacking their finances from all angles. Our system is not diseased by defaults, bankruptcies, and foreclosures- those are merely the symptoms of the illness. The real disease is the growing and malignant cancers of excess debt, and increasing expenses. While everyone might build their debt in their own way, we all typically suffer in the same ways when expenses increase. It’s one thing if one or two expenses go on the rise, but when all of the major items that we need to survive in this economy increase dramatically and simultaneously, it means trouble. For these reasons, is it any wonder that we are experiencing this dismal spate of foreclosures, defaults, and bankruptcies? What has happened? Let’s take a look:

The most significant expense-related problem to occur for most Americans was the dramatic increase in gasoline prices. This was caused by an increase in demand, coupled with the decline of the dollar. Very recently, we have witnessed the highest per-barrel cost and the largest percent of cost increases in history. This unprecedented occurrence nearly doubled the cost of vital items and services. As most Americans travel more than twenty minutes to get to work, our cost to actually go to work increased substantially. We went from unrestrained travelers, to citizens who count every mile, and every dollar.

Groceries and pet food have also experienced huge price increases. This has been caused in large part by the excessive cost of transportation. Most of the trucking industry, which is essential for consumables to get where they need to go, runs on diesel fuel, which has seen monstrous price hikes. In addition, the surplus demand and correlating price increases have cause corn and wheat to exponentially increase in price in a very short period of time. The fluctuation of these two items alone has served to severely skew the national average retail food costs.

Heating costs have gone up in direct correlation to the price of oil. Home heating costs were already at record levels when the economy began its more pronounced nose-dive, and now many Americans are wondering how they will afford to keep their homes warm throughout the long winter that lies ahead. To exacerbate this problem, the high cost of delivering energy sources has also risen.

The increased cost of doing business has hit harder than anyone might have imagined it would. The frozen credit market, and the housing crisis has served to make loans nearly impossible to obtain, and when extended have abnormally high interest rates. The types of loans that provide the capital for day-to-day business operations in America are a critical part of our economy. For this reason, we are feeling the effects of the increase of this particular expense rather sharply.

While we obviously feel the pain when the cost of large items rises even further, we pay special attention to the cost of small things- the little everyday things whose costs we don’t normally take into consideration. The cost of coffee and doughnuts in the morning, an espresso in the evening, renting movies or eating out, buying a pack of gum or a newspaper, internet and utilities- nearly everything has increased. In reality, it is through the small things that we truly can define how deep this problem actually lies.

These monumental price hikes are causing many to go down the roads of foreclosure, bankruptcy, and default. While it may seem overwhelming at times, we can adjust and pull ourselves out of this mess, though it may require some time. Bookmark this blog, and in the next installment, we’ll discuss ways Americans are decreasing or even eliminating the above listed expenses.

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This entry was posted on Monday, March 2nd, 2009 at 7:17 am and is filed under Economy & Politics, Financial Market, Mortgages & Lending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.