This is “food” for thought…
Tell Washington We’re Drowning
While Wall Street, Corporations and the Banking Industry have recently enjoyed record profits and significant progress towards a complete recovery, the average American is struggling to make ends meet. Consider the following:
Housing Costs – According to Loan Processing Services Corporation, 87% of the homeowners that have mortgages in the United States, are making payments on time. These are the people that are keeping the economy going. Most of these homeowners have fixed mortgage interest rates of 6-8%. Many of them have had to significantly cut personal spending, or are really struggling to meet their obligations.
When these people call the bank and ask for relief, they are being told they aren’t delinquent and don’t qualify for a loan adjustment. In other words, we can’t help you save thousands of dollars in extra mortgage interest payments that we get to keep (what a racket!) unless you ruin your credit by not making payments and defaulting on your loan. Consciences homeowners honor their obligations.
If this group tries to refinance, they are told they don’t qualify unless they bring tens of thousands of dollars to the table because they are underwater on their mortgage. If you’ve done things the right way, you’re dead in the water. If you’ve taken too much risk and can’t make payments you’re rescued. It doesn’t make sense.
Energy & Food Costs
Jan. 2009 Now % Increase
Gas $1.83/Gallon $3.56/Gallon 94.5%
Corn $3.56/Bushel $6.33/Bushel 73.1%
Soybeans $9.66 $13.75 42.3%
Sugar $13.37 $35.39 264.7%
Gold $853.25 $1,439.50 68.7%
Median Household Income
2008- $50,112, 2009 $49,777
January 2008 – 2.6 million
January 2009- 6.4 million
According to Stephanie Pomboy, President of MacroMavens, in the past six months, wage income has increased by $111 billion, while outlays for food and energy have increased by $116 billion. Consumers are spending approximately 4% more for necessities, just in the past six months!
With droughts in some parts of the world, floods in others and a rapid increase in demand spurred by increased consumption in developing nations, prices for household goods continue to rise at a rapid rate, while increases in income and prospective job opportunities continue to decline.
As consumer prices continue to rise, what will this mean for the majority of Americans who aren’t wealthy and struggle under the burden of a decline in buying power? And, how will this affect the housing recovery and economic recoveries?