My Views of this Non-Recession

By Bruce Clifford

These past several weeks have really been an eye opener for me. I have always been self sufficient and have been on my own since high school as far as being able to support myself, and later on a wife and child. In 1985, after graduating college I purchased my first condo in southern Florida. It was a small 1-bedroom apartment in nice area of North Miami, FL. My monthly mortgage payment was about $285 per month. I had a job as a manager for a local music retailer which paid me roughly $300 per week or just under $16K annual. I paid for my own vehicle (although it was a used car it was a good reliable one) and it would cost me around $10 per week for gas at approximately $1.20 per gallon in 1985. I had plenty of extra money to go out, to date, and to purchase the things I needed as a single guy to live on while being able to cover all of my expenses.

When I got married in 1987, I was earning around $20K annually, and with my wife working we were able to rent and later purchase a nice home in an newly developed area west of Fort Lauderdale. I'm not saying we never had financial difficulties like most young couples do, but we were always able to meet our financial obligations while earning nothing compared to what we earn today.

I now have a daughter in college, and a wife who still works. Between us, we earn over $100K annually. We own a nice home on a lake which we purchased in 1999. We own three Honda's which are all considered to be fuel efficient vehicles. Just a few years ago this formula worked. We were the typical middle class family, working hard, and having enough set aside for home improvements and nice vacations. Over time things first slowly seemed to change, and now this change seems to take place at a much rapid rate.

My mortgage payment which was around $700 per month when we first purchased our home is now around $1200 monthly. Most of the increase is due to the increase in both taxes and homeowners insurance. The home which I purchased for around $150K is now worth three times that amount, although it is impossible to sell in this economy. In addition, if I did sell I would not be able to find anything else affordable in my local market, so my family remains in our nice tranquil home on a lake. Since my home is part of a large community I have to pay a monthly association fee to cover maintenance and security which was around $125 per month when we moved in about 8 years ago. This same payment is now around $300 monthly and other expenses such as electric and sanitation have all doubled over this time period. For my three automobiles I am now paying over $600 per month for gas at the $4 per gallon rate.

It is becoming almost impossible to pay for everything I have (which is no more or no less then what I had just a few years ago). I have never had a year where my salary has not gone up, but the 2% - 3.5% increases I receive every year no longer calculates to what my needs are based with the rate of inflation. I am cutting back on many things such as dining out, driving, and I am cutting coupons and doing without some of the things I might want, but not necessarily need, from the grocery store. My grocery shopping experience has become very matter of fact. I go in to strictly purchase what I need and nothing else.

I work for a company which is in financial trouble. If things don't turn around it is quite possible I could be out of a job at any time. I have checked the job market, and it's easy to see there are not a lot of good prospects out there right now. Many companies are cutting back. If I lost my job today it would be only a matter of months before I'd lose my home, my cars; my daughter would more than likely have to postpone the rest of her college education.

I know many of you are in this same boat. I am not sure where the economy is going to go next(?) I am disappointed in our Government which has failed to step in and make any 'real' adjustments. Why are the oil companies the only companies who are truly allowed to turn large profits? So much of our increase in inflation is directly related to the rapid increase in our cost for fuel/gas. This effects every person and most every industry. It causes everything to cost more. Even with the feds lowering interest rates, I believe the housing industry is not poised to turn around anytime soon because most people are strapped for money and no longer have the extra means to buy and sell. It takes money to get a home ready to be sold or the price falls too low, and it takes money to purchase something new. This money which was there just a few years ago for the middle class is no longer there. I am considered middle class, but I believe middle class no longer exists in this country. Now I am just another guy trying my best to make ends meet during the first non-recession I can think of in American History, while earning what is considered to be a respectable income.

How does all of this change? Why does our Government and the candidates for President not address these issues as they should be addressed? What is the plan? How does this get fixed? How do we avoid having tens of thousands of middle class people become amongst the homeless? Right now, this is where we are headed.

5/29/08 Bruce Clifford