Middle of the week but almost to the end of the month and being the end of the month that means I get paid soon. Being on a once a month pay schedule does mean changing the way you spend money over the course of a month. With a biweekly paycheque that many people get, you have a near regular cash flow coming in. If you are married and both work and get alternating payweeks, that means money is coming into the house every week. That was the way it was when Andrea worked at a nursing home and I worked at RJR. Different story now; just one paycheque a month. With so much money upfront, you think you have quite a cushion to spend but in reality you don’t. Still got all of those bills to pay. So we have arrange to have as many of our bills become due at the beginning of the month. Money does not stay very long in the account when that happens. Also, we try to buy as much groceries and necessities for the month upfront which is typically a $700 upfront expense for a family of four. During the course of the month, there are a few bills that are due, some fresh food to buy and of course, gas for the cars. What ends up happening is that we are stretching as much as possible during the last month to get buy. It’s always worst when a month like July has 31 days in it. Just an extra day or two to stretch out the funds. So it will be nice to see the bank account with some money in it even if it last just a few days.
Swimming Championships going on in Rome and Canada is doing well so far with medals in synchronized swimming and diving. None yet in the swimming disciplines but there is potential for one or two yet to come. Canada is assured of one more medal as the womens team plays for gold in the water polo event against the United States or Greece.
Finally, I came across this video which may be of some interest. Now I always pride myself in being able to take care of myself which includes doing my own laundry. Doing laundry means folding clothes which I thought I always have done a good job before but after viewing this video, I can fold my shirts much better than before.
A long time ago, 8 years to be exact, life was sweet. I was earning extremely good money as a software developer and Andrea was working as an assistance activities director and our combined salaries was over six figures. We had money in the bank, able to eat out every week, did not have to worry about buying anything we needed as we could definitely pay for it. We even bought bought two brand new cars.
But things happen and ever since then it has been a hard scrabble trying to get by. Getting laid off, moving to a new state to find work, medical issues, pregnancies and buying a new house for a growing family all have contributed to our current situation now.
When you have a one income family, the luxury of having a fallback position is obviously not there. Before, the second income provided us with the buffer to do the things we want to do outside of what we need to live. But since Andrea no longer works full time, my income alone carries us.
Of course, being in the profession I am in, I am reasonably well paid. Supposedly above the median income for this area. But the past few years we have taken on a lot. Losing a second full time income, buying a new home and the expense of moving and furnishing that home, medical bills galore arising from Christen’s hospitalisation and Andrea’s pregnancy with Nicholas. Of course now, being pregnant with Patrick means another hospital bill, one even more than before given changes in our company’s health plan: about $8000 out of our pocket.
It is overwhelming.
So to meet the bills, current and future, we find ourselves now adopting a much more frugal lifestyle.
So the first thing is look at what we cut back on. Some things are fairly obvious like do not eat out as much. So now, we eat out at a good restaurant just once a month now, around the time I get paid. On occasion, we may pick up a meal at Wendy’s or McDonalds; if we extend ourselves, perhaps at the K&W cafeteria.
Then are the decision of whether we need it or don’t in terms of the value it gives us for the price we pay. So it was that our cable service is now reduced to the bare minimum. No more HD channels for awhile; indeed it is just 10 local channels now. Also, goodbye to the cell phones. We hardly ever use them and as our contract obligations have been fulfilled, we switch to a prepaid plan. Between the cable and cell phone cutbacks, we found $110/month.
There are a few more tweaks we did like dropping the monthly fee plan at our bank. As I get direct deposit into my account, I do qualify for a no fee account but it does mean that I now have to pay for new checks, wire transfers, the ATM surcharge at other banks’ ATMs and so on. Just got to make sure that we use online payments, cash back at the grocery and a few more adjustments and we will be okay.
For the utilities, we are on fixed payment plans so that we can make more predictable budgets without the wild swings in costs during the seasons. of course that means paying $65/month for the natural gas bill in the summer time but as it builds to a credit balance, it means I do not have to pay out $200 in February for the heating cost.
But for actually savings, we can not do much more. We moderate our heat and AC consumption, lights are turned off and so forth. We do not water the lawns and use the economical mode for washing clothes and dishes.
The sad thing about our cutting back on our utilities cost is that we contribute to the problems that the utilities are not earning enough money now so they are asking for rate hikes for water and electricity now. Fate simply conspires against us.
We do not drive as much anymore. One thing we used to do as a family once a month was go on long drives along a state highway and see what is out there. While gas prices are better than they were last year at this time, it is still a considerable expense. Of course, on these drives, we used to stop at local restaurants for lunch; can not do that either.
Then are the entertainment aspects of life: go to fewer movies, concerts, shows and so forth. We did not do a lot of that before and consequently, we are not saving much by it. Still, a family can not be entertained by television alone so Andrea and I have taken to playing cards on occasion to pass away the time. We will start doing board games too.
Looking at what we spend in a month, there are not too many more things we can do to cut back. Most of our costs are relatively fixed. The only item that we can control is the grocery bill.
Surviving a recession when it comes to food is sometimes a choice between eating to be fed and eating to be fit. That is to say, you can eat cheaply and enough to feel satisified but generally that means eating a highly processed high carb diet. Plenty of bread, pasta, cheap frozen meals, canned goods. The alternative is eating fit which means eating higher quality foods like fresh fruit and vegetables and cooking with whole foods wherever possible. To do so though means a higher grocery bill. Freshness and nutrition comes at a price.
My feeling is that we eat too much as it is and not very well. Perhaps buying $15 worth of various berries and carefully parceling it out to last a week may prove more of a benefit than buying $15 worth of snack cakes.
Another thing we taken to doing is buying as much of the month’s groceries up front at the beginning of the month using a calendar to plan meals. The plan has gone through fits and starts especially when the menu starts get switched around because of change of plans for the evening but it does allow us to concentrate on what is important and not buy needless items. if it is not on the menu, then we do not buy it.
Perhaps by going through this recession, we may come out of it much better people. Lower debt, better diets, perhaps more socialable as a family are good things to accomplish. It definitely requires a change in the lifestyle we have been accustomed to along with the many sacrifices it entails but in the end I think it will be worth it.
I really need to start some articles again.
Well, the long Memorial Day weekend is coming up, a holiday which I am really looking forward to enjoying. It has been a long five months to our last holiday and I really do not like using my personal time hours to get a break now and then. Trying to save those for a bit of a vacation this summer.
There are quite a few things to write about but just need the time to do so. The past few weekends have been busy with family things. Two weeks ago, it was the Celtic Festival, which we go to every year. Then this past weekend, we had Madeleine’s dance recital, which turned out to be a very big deal as the grandparents came up from Florida and family friends also attended just to see her five minutes of fame. She did a wonderful job. Of course, there are photos aplenty which can be found in my photo section.
Seeing a bit of price shock at the gas pump. For nearly three months, the price of gas had been fairly stable, around $2/gallon (50 cents/liter). In the past three weeks, though, it has jumped 30 cents to $2.30/gallon (57 cents/liter) . Oil prices have been increasing a bit in the last few months but most of this recent retail price increase is attributed to lower supply as refineries switch to different summer blends of fuel. One would hope that prices pull back in awhile as the refineries start to resume full production again.
Of course, if the economy recovers, people may start driving again a bit more than they are now. There are signs of bottoming out of the worse of the downturn but just being at the bottom does not mean we are in recovery mode. that may take some time especially as consumers are holding back on buying things. The stimulus package will take some time to work its way into the economy, generating jobs and increasing incomes. But there is cause for hope.
The recent announcement of fuel mileage increases over the next several years is a welcome sign for the environment. With other plans in the work to have people trade in their gas guzzling clunkers for credit towards a new car, we should see the auto industry rebounding and as much as auto industry goes so too does the manufacturing sector of the economy too.
These are hard times to be sure. Economy is in the dumps, more people are unemployed now than it has been in recent decades, credit is tight but people are afraid to spend anything for fear of the unknown. It is a time for sacrifices, big and small.
I too am feeling some financial pressures these days. Buying a house last year and all of the associated expenses with it has really put a strain on the family finances coupled with the fact that only I now work full time as Andrea is now a semi- full time mother. One pay cheque can only go so far these days as my father used to say.
So we have cut back on many things. We do not eat out as much anymore. Fast food drive throughs and K&W cafeteria are pretty much it. Steak restaurants are strictly special occasions now. Even something like the Village Tavern is now out of my price range.
I have cut back on my magazines and subscriptions. I do not buy general interest magazines like Atlantic anymore; just some specialty magazines for photography and Macs. Which is a pity as it those general interest magazines that do provoke thought and discussion in ways that newspapers and television never do.
Even little occasion things like going to the coffee shop are becoming rarer now. Movies are once a month at best now.
In terms of household expenses, there is not much to work with in terms of cutting back as we were never extravagant to begin with. We do not have landscaping services nor do we go out antique hunting to fill the house with knick knacks. Put the home on equal payment plans with the electrical and natural gas companies so that we can at least budget for a constant dollar amount for them rather than have it fluctuate wildly month to month depending on the season.
So when I look at the budget now, there is not much fat there to cut. When our wireless contract ends in May, we will cancel the plan and then go to a pay as you go plan. That will save about $40/month. Other telephones expenses including DSL are stable and needed for us.
Everything else on the budget is necessary and can not be cut in any fashion except for one thing. The cable television subscription.
Right now, I am paying $80/month for a package deal that includes basic, standard, digital tier and high definition channels. Including all of the On Demand choices from Time Warner Cable, there are perhaps 300 channels available for viewing. Most of them though, we never watch. Madeleine watches pre school television like on PBS or Noggin; Christen similar channels especially for Law & Order; Andrea watches Hallmark, Lifetime and some reality shows on TLC. As for myself, I tend to be more diverse in watching the Discovery lineup of channels, news like MSNBC, broadcast television and plenty of sports on the ESPN network.
We have been one year now in our home in Winston-Salem. It is the first home we ever owned after years of renting apartments and houses. It is a decent house with three bedrooms, master suite, separate dining room, a big back yard and so on. We were under some pressure to get a new home as Andrea was expecting our new child at the time and we needed more space. We thought it probably be better for us to buy a home rather move to another rental. Having property of our own is considered to be a good thing so they say.
So we looked around a bit and after a few walkthroughs we came upon the house we now call our own. Considering that the housing market was on a definite downturn at this time last year, we struck a pretty good deal I thought at the time. We got $11,000 off the original list price and had the sellers pay all closing costs along with some improvements such as radon mitigation ($1200 just for item) and some odd and ends like the refrigerator. We received a decent interest rate of 5.75 from NC Housing as we were first time home buyers. All in all, we were reasonably satisfied with the deal.
Now in our neighbourhood, they were other homes up for sale. Indeed, it was looking at another house that we discovered our home. These homes were on sale before we came to the neighbourhood and remain so months after we moved in. Eventually, in the past few months, they were sold in the face of the economic collapse.
The economic collapse has had many origins but the primary one that everyone agrees upon is the general decline in housing prices across the country, being more pronounced in such states like California, Nevada and Florida. No area was unaffected, not even North Carolina.
One side effect of the decline in home prices is that many people have homes that have mortgages that are more than the price of the home if they try to sell on the open market. This is different from those people who got into exotic mortgage arrangements such as interest only loans or 5 year adjustable rate mortgages and found themselves pinched by escalating house payments, more than they could afford. No, people who find themselves in a negative equity situation in their homes, a term also known as being ‘underwater‘. Millions of people find themselves in this situation. Is not they can not pay their bills or their mortgage; indeed they can manage quite fine provided that they do not face any personal economic shock. They did nothing wrong but just are feeling the effects from collateral damage from the housing prices collapse.
But now, many of them have to consider the value of being in their home now. For some, their home was more of an investment vehicle and since they will not recoup their expenses, it is just easier to walk away from the house and put it into foreclosure. But for most people that really is not option. It is their home and as the economy is weak everywhere now, it is just as well as to stay put where they are. Knowing though that their home is worth less than what they paid for it does act as a sort of an economic depressant. A house is a family’s most significant asset and for many people it is like the saving account and retirement fund they never got around to build. When that house value declines, people feel poorer and start tightening their belts, When millions of people start doing that, then this consumer-driven economy starts slowing down even more.
Knowing all of that, I wondered how my house would fare in the current market. Locally, Winston-Salem has been affected quite a bit by the economic downturn. Local unemployment rate is increasing to 8% now. Credit is tight so even if you are in the market to buy a home, no one may lend you the money.
So I used an internet tool called Zillow to get a rough ideal of what house would sell for in this market. Zillow works like an appraiser, a free one at that, whereby it estimates a price for your home based on the valuations of other home sold in the immediate area. That valuation is a bit of a problem as it looks back at past sales for months and years back which may not be align with the realities of today. If it uses historical prices for homes, it may give an inflated figure for your home. Currently, my Zillow estimate for my home is about $10,000 more than what I paid for it.
Sounds good, right?
Well, no. Zillow has another useful feature where it shows the houses that were sold in your area and displays their actual closing price. That is the critical part of the situation. A home we looked at, a year ago listed then for $170000. The Zillow estimate was $150,000. Five months ago, it sold for $128,000. Around the corner, a home with a Zillow estimate of $204,000, sold for $138,000. These houses were similar in construction to our house with three bedrooms and 2.5 baths. Using those homes and their sale prices as a guideline, I would estimate that my home will sell for $30000 less than what I paid for just a year ago.
In other words, I am underwater on the house.
Now, as I mentioned before, being underwater on the house does not mean I can not pay the mortgage on the home. Nor is my mortgage payment is going to skyrocket in the near future as I have a fixed rate 30 year mortgage. What it does mean is that I am not going anywhere anytime soon. For better or for worse, I will be in Winston-Salem for the next 5-10 years as housing prices slowly recover from their dramatic drop. The era where housing price increases exceed the annual inflation rate by at least 100% are now over. More typically, housing price appreciation will conform to their traditional annual rate of increases which is 1 to 2 points more than the inflation rate though that will vary by region.
I have always prided myself on being quite mobile. It seems that every few years, I pack up everything and move somewhere else, typically in pursuit of employment. That is what brought me here to North Carolina in 2002. Indeed, that is the one strengths of the American workforce, its mobility, the ability to move across a state, a region or the entire country.
If you are a renter or in a similar situation, it is fairly easy to move away but as a homeowner, it is more complicated as you have to sell your house before being able to buy another one. In the boom times of the housing market, you had reasonable expectations of being able to sell your home in a decent amount of time at a price you are comfortable. Now, that option is not readily available to anyone. People are not buying homes and people selling homes can not afford to take major losses if they sell their homes for less for what they owe. So people will remain where they are and not go where regions of the country will experience significant job growth in the near future. Going where the work is comes with a high price tag.
But in any event, I am not planning to go anywhere soon. I like being in Winston-Salem and our house will take care of our needs for years to come. Just wish I had the peace of mind that my home is worth financially what I paid for it.
Last week, the Winston-Salem Journal announced it has cutting back staffing immediately including its long time NASCAR reporter. The Detroit New was exploring dropping its print edition to just the Thursday to Sunday editions. The Christan Science Monitor has dropped all of its print editions in favor of an on-line edition. Just some of the headlines coming out of the newspaper business in the past few weeks as the recession shatters the bottom line results for all papers across the country.
For course, such changes in the newspaper trade has been going on for decades now. I think every recession has generated news about the business going through massive restructuring, cutbacks and shutting down of papers. Of course, there have been many factors in the decline of newspapers: television news is considered an adequate subsitute for the printed word, people have less time to spend reading the paper and of course, the Internet which can provide access to the news from anywhere in the world.
Newspapers – a very brief look back
Decades ago in the 20’s and 30’s, newspapers were enjoying their heyday as important media vehicles, drivers of public opinion through the editorials and slant of the papers view and shaped popular culture through the variety of columnists. Many cities had multiple papers that engage in true competition with one another. Papers had multiple daily editions to reflecting the new events of the day since the morning edition. To aspire as a journalist whether in general news, business or sports was considered to be a worthy career and many journalists have become legendary.
The decline of newspapers started slowly. Local papers started to drop multiple editions and then merged with one another.Most cities now only have one daily paper now. The paper itself began to shrink in size, as local reporting was replaced by feature writing obtained from wire services. For our local paper, the Monday and Tuesday editions have really shrunked in size as several sections were compressed.
Now, the maturity of the Internet as an aggregator of information may do in newspaper though in many ways, it is the newspapers that helped grow the Internet. People use the Internet for many things but one of the major draws of the Internet is to access breaking news as it develops around the world as well as access the content generated by newspapers for their on-line editions. For users of local news source, the amount of news that local papers release for Internet consumption may be all they need, so they feel no reason to subscribe to the paper or even pick up a newstand copy. Same situation for the more national of newspapers online like USA Today and the New York Times.
Advertising – the revenue problem
While we think of newspapers as great endeavours in writing and fighting for the public cause, in reality, papers today are mere vehicles to promote advertising of local and national business. What matters more to publishers these days is the amount of ad copy in the edition and the price it can charge for a one quarter page ad. The price of a subscription or newsstand copy does not even begin to approach the covering the cost of a newspaper. Only advertising can do that and in recessionary times, newspaper advertising always takes a big drop.
Yet, for all of the logic in moving from the printed page to an Internet version, there are some major challenges. Like most businesses that seek to profit from the Internet, it is difficult to generate the ad revenues that once were a given in the printed version. A newspaper set its ad rates based upon the size of the ad along with the circulation figures it can quote of each edition of the paper throughout the week. It is a passive excerise as advertisers did not know whether people would actually spend three seconds of their time to read over an ad’s copy and its associated graphics. Now with the Internet, advertisers can be more assertive on what they think is a more valid way of assessing whether their advertising works, clickthroughs. In the beginning of web commerce, page impressions or page hits were deemed as the best parallel to the old circulation figures of printed newspapers. But the Internet is far more interactive so it more appropriate to see if a page visitor actually visits the advertiser’s web site and just not read the ad on the page. This is what is called a clickthrough.
It will be difficult for newspapers to rely on clickthroughs to allow them to recover their costs through advertising revenues. For myself, I rarely ever click on an Internet ad on a news site. Yet , the original revenue generating scheme for newspapers on-line, having on-line subscribers pay for access to content, never seemed to work either as most newspapers on-line ended up dropping that method of revenue in favour of free advertising supported content. Even limited use of restricted access to generate revenue like New York Times practice of having their best columnists behind a pay wall, never took either.
Everything is local
One of the things that is holding newspapers back these days, is that a newspaper tries to be all things to all people especially now as most cities have only the one paper serving it. Yet is it in the best interest of newspapers to produce pages of information that most people can access on the Internet. Any lead article for a newspaper dealing with a national or international event is probably something I have already read many hours earlier or I can read later on somewhere else on the Internet. Sport scores, comics,business news and statitics are all available on the Internet. So in that light, what is the relevance of a newspaper today?
In a word, locality.
One of the few things I can not get on the Internet or from any source really, is local news in depth. Television newscasts can highlight some stories but only newspapers can provide the indepth coverage of a local event and give it context. National papers like the USA Today or the New York Times are great at providing national and international news but care not what is going on in Winston-Salem unless it has national interest and in many instances, require local media to develop the story before it is really for a national audience.
When I read the local paper now, I generally gloss over the front half of the paper where it comes to national or international news. Sometimes I will see an article of interest that I had not seen before elsewhere that may cause me to read it. It is the local news and commentary, though, that is more important to me now. It is the only thing that distinguishes the local paper from the one in Charlotte or Raleigh. Yet by reducing staff, the Journal is throwing away its only real advantage to remain viable in the future.
I think for many families, the only real edition that they look forward to receiving is the Sunday edition with the sales flyers, classified ads, feature articles and so forth. Many of the articles that appear during the week in the paper could very well could be retained until the weekend edition. In a way, becoming a weekly may be the best option for small city papers. Most small towns have to live with weeklies now and it seems to be a viable business. For breaking news and updates, the web edition of the paper could fill in that gap.
The Future
Perhaps, the future of the newspaper industry is that a few papers like the New York Times and the Washington Post will have the resources to do the national and international stories that need to be covered. A writer from even a mid-sized city paper is unlikely to provide much different content than a reporter from those papers. For those papers, a focus on state and regional news may be a better option.
The rumours of the death of newspapers is probably greatly exaggerated. Indeed, the Internet needs newspapers to supply it with the content to keep people coming back. But it can not be a free ride either. Papers can not be exclusively reliant on web advertising revenues to support their business yet the subscription model as previously tried before has not really worked either.
What is the solution remains unknown but as long as people need to be informed, there will be a need for newspapers. But the form of newspapers in a few years may be quite different as we know newspapers today.
The economy is crippled. Homes are being foreclosed upon; people can not meet their debts; jobs are being lost. More and more people and families are being driven into bankruptcy. But it is not just the bad economy that is forcing people into bankruptcy. In reality, the primary reason why people file for bankruptcy today are extremely high medical bills due to a major injury or illness or even prolonged chronic illnesses.
Medical care is expensive just for basic care; Simple visits can cost well over $100 without coverage or those with high deductible health plans that seem to be the rage among employers these days. When the full brunt of technology is applied to a disease like cancer or healing someone from the aftermath of a car injury the bill can run into the hundreds of thousands. If long term care is required after the hospital stay, expect costs to double.
Even with health care plans, people have a lifetime limit of coverage, typically $1 million. If someone has a condition that requires lifetime care, a family may exhaust that limit if they still have coverage. That is the irony of health care today; diseases or injuries that killed you in the past can be treated now but may leave you with a much lower quality of life or destitute or even both.
People do not by nature seek bankruptcy to avoid paying their debts. They know the impact it has on their ability to seek future debt for a new home or car. Bankruptcy is not a free pass for life. But at some point, they just can not pay on their debts any more given the choices of surviving through life or pay the creditors. At one time, there were debtor prisons where people imprisoned for being poor. The personal bankruptcy laws addressed that by allowing people to start with a clean slate. If it is demonstrable that a person just can not pay their debts, then as the saying goes, you can not get blood from a stone.
But I digress. The point I am trying to make is that health care should not a situation where people should be running up massive debts. If a health care plan is in place for the nation to cover everyone, at the very least for emergency and catastrophic care, then perhaps the burden will be lessened and people will never have to be in a position to choose between paying a hospital bill or groceries.
Bankruptcy is not a fun thing to be going through when you are still recover from a major health condition. No, not fun at all.
Last night I filled up the CR-V with regular gasoline from our local Sheetz station. Price per gallon: $1.69; total fill up price: $16.83. This is just after I filled up the Eclipse for just under $23 with premium gasoline. Just five months ago, I was doing fill-ups for $35 for the CR-V and $55 for the Eclipse.
Needless to say, less money spent on gasoline means more money available for other things. I figure that my monthly savings on gasoline is $150/month compared to the peak prices I was paying earlier.
Now if those sort of savings are experience by other families, we are talking about billions of dollars saved from higher gasoline prices within the economy. By itself is like another stimulus package for consumers. When you think about the cost of transportation and energy that is part of the cost of every thing we buy, lower gasoline prices will mean lower prices for all goods eventually in particular, food prices which are still relatively high compared to earlier this year.
Then there is the automobile industry. Right now, they are trying to get a bailout for their companies to fix the mistakes they made in managing their companies over the years. Truth be told, the companies only did well as they did for much of the decade because of the high profit margins for their SUVs and trucks, notably low mileage vehicles. When the price of gasoline skyrocketed, nobody wanted to buy a gas guzzling SUV. With the downturn in the economy, nobody wanted to buy anything else from them either. If gasoline prices remain low for awhile, perhaps more SUVs and trucks will be sold giving the companies a boost in their revenues and profits, perhaps buying them time to re tool their production lines for better selling and more fuel efficient vehicles.
After electricity, gasoline is essential to the American economy. As a factor in the cost of everything that is produced or provided as a service, when the price of gasoline becomes lower, profitability improves and households have more discretionary income. As a nation that imports most of its oil for refining into gasoline, lower oil prices mean better trade balances and by extension between balance payments.
The key is of course that prices remain low and stable for a considerable while. Volatility as we have experinced this year in gasoline prices will not make anyone confident in the health of the economy. But as this recession starts deepening, demand for gasoline will drop as people who do not work tend not to drive as much or buy as much stuff. Prices will remain low for some time, perhaps extending months or years beyond the end of the recession.
The main worry though in a time of price decreases, due in part to lower gas prices, that the deflationary effects of less demand will start a deflationary cycle on a scale not seen since the Great Depression. if there is no money floating in the system to buy things, then the economy will remain stagnant. This is the primary reason why the government is becoming the buyer of last resort so to speak. By adding money into the economy at various points (housing purchases, auto bailout, stimulus checks to households), the government hopes to prop up demand, keep workers employed and start building profits for companies.
More than anything else, this economy depends on the consumers buying things unlike China’s which depends more on exports of manufactured goods. People do not buy things when they feel personally threaten by the economy’s downturn; consumer confidence decreases and it decreases to a point where it starts feeding on itself so that economy never gets a chance to start recovering without a major shock to knock it off its downward spiral. Stimulus packages help to some degree but I think that when people see something like gasoline prices at a level that they have not seen for years, it gives them one less thing to worry about for their household budget. That should in turn provide a floor under consumer confidence and perhaps the basis for an economic recovery.
Of course, it will take more than cheaper gas to get the economy moving again. But the economy has always proved to be resilient and able to adapt to circumstances and may be in two or three years time when economists look at the Great Recession of 2008-2010 and determine the factors that lead to the economic recovery, they will probably look at the drop in gasoline prices as the point when the economy started to recover.
Until then, I can go on road trips again.