Into the Economic Abyss - How deep will it get?

[Liberal_in_LA]

Into the Economic Abyss:


http://abcnews.go.com/Business/Economy/wireStory?id=4508624

*** SNIP ***

Signs of the pinch are showing up everywhere:

—By the end of 2007, 36 percent of consumers' disposable income went to food, energy and medical care, a bigger chunk of income than at any time since records were first kept in 1960, according to Merrill Lynch.

—People are treating themselves less often. The National Restaurant Association says 54 percent of restaurants reported declining traffic in January, and the government says eating at home increased last year for the first time since 2001.

—Financial planners say that more than ever, parents are calling for advice on how to deal with grown children who have moved back in with Mom and Dad after losing a job or just to save money.

—Less trash is being set on the curbs of Mesa, Ariz., where surging home foreclosures are leaving more houses empty. That means fewer homeowners paying the city $22.60 a month for pickup. And William Black, the city's solid-waste management director, says people aren't throwing out as many appliances and bulk items, like furniture. They're sticking with what they have.

[cliss]

1. An amazing figure -

we now spend 36 % of our disposable income for the basic necessities.

This is the surest sign that we are moving towards a 3rd world country. Typically, poor nations spend proportionately more on the basics. Wealthy countries spend less.

Re: how far will it go?
I hate to be the one to say this, but here goes: our economy is bankrupt. It's not totally due to Iraq, but that was a big factor. The banks are BANKrupt. They're broke and there's really nothing anyone can do about it. If there was a solution, it would have been done by now. There isn't.

By June of 2008, things will start unraveling.

[dixiegrrrrl]

2. and our disposable income

is less and less. State and Fed. taxes took almost 40% out of my paycheck each month.
So ya figure 36% for basic necesities
and 40% for taxes, leaves 24 % for..."frills".
Depends on what counts as necessities.

[Liberal_in_LA]

4. It will be interesting to see how the GOP spin this as we get nearer to the election n/t

[avenger64]

3. The importance of oil is understated here ...

... the financial markets may, to some extent, 'straighten themselves out', but that's not going to put more oil in the ground. So we're all going to be facing inflation for a long time, as that gets priced in. We can't sustain a civilization built on waste and consumption, which means that we're going to have to re-appraise our priorities, especially as they pertain to economic growth.

We're entering a new era, where the old rules don't apply. Oil is never going to get appreciably cheaper. We need a re-design fast.