| Cars Break the Family Budget |
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| Written by Kate Trainor | |||||||||
| Friday, 29 February 2008 | |||||||||
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The NYT told the story of one such family: For ordinary Americans like Phyllis Berry, a 31-year-old factory worker for General Motors in Cleveland, gasoline costs are starting to hurt. While Berry’s four children sacrifice an extra double-feature of Finding Nemo, other families are undoubtedly doing more to cut back than skipping a matinee or the buttered concessions. Most American families rely on a car for the bulk of their transportation needs, yet it could be the family car that leads the Cleavers—and the rest of the country—to financial demise. Our cars will catalyze bigger financial repercussions than mere penny-pinching at the pump. “The effect of high oil prices today could be the difference between having a recession and not having a recession,” said Kenneth S. Rogoff, a Harvard economist. The good news is that Americans are using less fuel—because they can’t afford it. The NYT reports: American consumers have responded belatedly by cutting back on their energy use. Oil demand in the United States grew by just 0.4 percent in 2007 and is expected to be flat in 2008. As gas prices rise, it appears that Americans are filling up less frequently. Will this mean we’ll learn to rely less on our cars? Whatever the case, we know that our current model isn’t sustainable. Cars are an expensive habit—and are growing more expensive by the day. How much will we pay to get our fix, and for how long? See also:
Comments (4)
brian goldner
said:
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it could be due to my training in economics, but I am a firm believer that hitting someone in the wallet is the best way to change their behavior. My school price of on campus parking, and as a result the ridership of our park & ride shuttles soared! As gas rises a lot of people are going to look at alternatives again. Cities with public transportation systems that are underutilized will see an increase in ridership as most in town trips become MUCH cheaper NOT TO DRIVE, even if you already own a car. For example, cities like Sacramento and San Jose, with excellent light rail systems, are likely to see the share of transit ridership go up as gas prices soar. |
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I totally agree with you, Brian. And the price of gas just scratches the surface of the true costs of owning and driving a car. Of course there's insurance, car payments, upkeep, etc. But also the more hidden car-subsidies like highway/road construction and maintenance, subsidized public parking, etc. How about health care expenses and global warming? It's amazing (at least to me) how all of these topics interrelate. If the true price tag and behind-the-scenes economics of car-culture were more prominent, I suspect the effect on consumers would be far more pronounced than that of more expensive gas or on-campus parking rates. |
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The car and family budget crises are nothing new. We raised 4 kids on my factory job. Every time I told my wife There was a problem with the car, who was the chief financial guru I would get the hairy eyeball. Maybe that is why I did most of repair work myself. |
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That article is very accurte! |
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