US Economy Forecasts

Jaci Rae asked:


With the onslaught of Katrina, how will the world survive the economic chaos that is about to unfold? Our economy cannot sustain any more surges in oil prices with the AP wire reporting $5.96 a gallon for regular gas in some areas of the U.S.

Most U.S. cities aren’t set up with mass transportation, and the typical American is required to travel up to 50 miles a day or more for their job alone.

U.S. resident made less money than they spent for basic necessities prior to Katrina, how will they cope after?

*Average Monthly expenses, based on two incomes

Telephone $37.93 Electric bill $99.65 Water w/garbage $80 Food $575 Gasoline (two cars, $2.53 per gallon.) $969.60 Mortgage Payment $2321 (Based on a three bedroom home in GA. East or West you are looking at least a $5463 mortgage.) Car Payment $289 (based on one car only) Cellular Phone Bill $89.99 (family plan) Quarterly Car Insurance $789 (two cars) Total basic expenses, with nothing extra like car repairs, co-pays, medicine, school supplies, clothing, and household necessities: $5251.17

The average pre-tax income based on the location above? Female $2,047; Male $3,089

If you live on the East or West Coast, while income can be higher, the average male making $4497 and females $3189, monthly bills are substantially higher. The total average monthly expenses in those areas? $9535.83. Pre-tax income? $7686.

How can the economy continue to thrive, when most people in the U.S. can’t afford their monthly bills? A large mortgage broker stated that 100% of their housing loans are now interest only with buyers using their mortgages as loans. Buyers have been banking on an escalating housing market. What will happen to them once the full force of Katrina hits its mark?

Now with gas prices skyrocketing, people may not be able to keep their jobs or they will have to “pay” to go to work, and with the jobless rate of Katrina expected to hit 25%, how can the economy survive?

What’s the answer to our imminent economic catastrophe? I don’t know, but I can tell you that it feels like we are heading for economic disaster of epic proportions if something isn’t done and done quickly. The end result will be a society that is based on the really rich and the very poor. There will be no “middle class.”

With standards already being set at poverty stricken or destitute, how much more can we sustain? How much more can the world sustain?

Greg McGuire asked:


Driving Strategies

The cheapest and easiest way to improve your fuel economy is to change how you drive your existing car.



Air conditioning. As a general rule, if you are driving under 40 miles per hour (MPH), it is more fuel efficient to turn off the air conditioner and roll down the windows. Above 40 MPH, however, the drag on your car created by the open windows causes you to use more gas, so turning on the air will actually improve your fuel economy.

Acceleration. When accelerating, do so gradually. Stomping the gas pedal at every traffic light or stop sign causes your engine to suck fuel to meet the heavy load you are putting on it. A more gradual approach can significantly improve fuel economy.

Deceleration. Let off the gas well before a stop sign or traffic light and allow yourself to coast to a stop while gently applying the brake. Accelerating all the way to the stop and then slamming on the brakes not only wastes gas, it uses up your brake pads more quickly.

Speed. For every ten miles per hour you decelerate, you can save up to 5 miles per gallon (MPG). So if the speed limit is 65 MPH and you drive 55, you can increase your MPG by 5 miles.



Car Maintenance

In addition to improving your driving strategies, use the following car maintenance tips to maximize your fuel economy:



Tire inflation. Make sure you keep your tires properly inflated at all times. This not only lengthens the life of the tire, it will help your fuel economy. By and large, the standard inflation for most car tires is 35 pounds per square inch (PSI).  Some mechanics may recommend inflating your tires to 30 PSI to improve riding comfort, which is true, but with gas prices the way they are the best thing to do is maintain proper inflation. Please make sure you check with either your tire dealer or the tire owner’s manual for proper inflation instructions.

Fuel grade. Mountain West states (New Mexico, Colorado, Montana, etc.) offer 85 octane fuel, whereas most other states offer only 87 octane and up. Check your owner’s manual, since some models have a minimum octane requirement. Using a lower octane fuel than what your vehicle has been designed for drastically reduces fuel economy. Also, it does not improve your gas mileage to use a higher octane fuel than the minimum requirement for your car.

Alignment. Most cars need an alignment every three to five years, although your mechanic will recommend you do it more often than that. A simple test of your alignment is to briefly release the steering wheel while cruising at least 55 MPH on a straight stretch of highway. Please make sure there is no oncoming traffic and that it is a calm day! If your car veers immediately to the left or right, have your mechanic check the alignment. Alignment problems affect your fuel economy and wear your tires down more quickly.

Tire rotation and balance. Have your tires rotated every 5,000 miles.  This not only improves their life span but also causes them to wear evenly, meaning improved fuel economy for you since they ride more smoothly. Your tires should be balanced when they are first installed, and in general they should not need another balancing. Regularly check for the wheel weights mounted on the rim of each tire on your vehicle. These will be oblong metal pieces clipped to the rim, one per tire. If you don’t see one on your tire, ask your mechanic to balance the tires when he rotates them. Most tire dealers that sell you your new tires will rotate and balance those tires for free.

Tune ups. Check your owner’s manual for the recommended life span of your vehicle’s spark plugs, plug wires, and coils. In general, spark plugs should be changed every 55,000 - 75,000 miles and plug wires every 100,000 - 120,000 miles. If your engine idles very rough, or cuts out easily, have your mechanic check the coils. Also make sure to change out your vehicle’s air and fuel filters regularly.  All of these parts affect your vehicle’s fuel economy.



Buying A New Car

When considering purchasing a new car, remember that the miles per gallon estimates posted on new cars are always very optimistic. Those estimates are generated by operating the car in perfect driving conditions, as in 55 MPH on a windless day at sea level on flat ground with the windows rolled up and the air conditioner and radio off. Typically your actual miles per gallon will be two to five gallons less than the estimate.

Go smaller! Technology has improved to the point where many smaller vehicles have high safety ratings and perform very well in adverse driving conditions. Remember that if you spend a little more on a smaller car with posi-traction as opposed to a bigger lunk with four-wheel drive, savings will be realized in improved fuel economy down the road. And you don’t have to put the thing in four-wheel drive, it will do so itself!

Go hybrid if you can. Some very important factors to remember: hybrid and electric car technology is skyrocketing right now, so the vehicles that come out in five to ten years will show enormous improvements over the ones available today. If you have a lot of disposable income and buy a new car every three to five years anyway, go buy a hybrid today. If you are not that lucky, follow the tips above to maintain your current vehicle and tough it out until the car companies can bring to market all the technology in development right now.