It is probably safe to say that our economy is in the toilet. Everyone is so apprehensive of using the big R word in spite of sending an all out red alert to citizens. But, let’s face it, this feels like a recession.
And the bigger question is, are we or aren’t we in one? Don’t look to politicians for the answer, because recession means political suicide. Yet, stockbrokers, financial advisers and mortgage companies can’t give us an answer either.
Well it’s always tough to tell, because you don’t know if you’re in a recession until you are actually in one. According to MorganStanleyindividual.com, by definition, a recession is a decline in business activity. It is often defined as two consecutive quarters with a real fall in gross national production.
Furthermore, a recession will show visibility among industrial production, employment, real income and wholesale-retail trade. Unfortunately, we are already experiencing some of these downfalls.
A main cause of the downward spiral in our economy has been because of sticker shock at the pump. Take a look at any street corner and gas prices are still on the rise. California residents are paying an average of $3.74 a gallon, well above the national average of $3.39 a gallon. According to Tuesday’s Los Angeles Times Business section this was 46.9 cents higher than last year. It seemed like just yesterday we were biting our nails hoping prices wouldn’t rise above $2, but now we’re waiting anxiously to see if they double that.
Additionally, because truck drivers are paying more for gas, this is driving the price of food up as well.
Due to a painful mix of layoffs and rising food and fuel prices, startling official statistics show that a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.
Food stamps are the symbol of poverty in the United States and in the era of the credit crunch, a record 28 million Americans are now relying on them to survive. This is the highest level since the aid began in the 1960s.
This is a sure sign the world’s richest country faces an economic crisis. So let’s stop worrying about using the R word and let’s start working on getting back on track.
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