According to the Energy Department, Americans are expected to have to pay at least 15%, or more on average to heat their homes this Winter. Consumers who rely on natural gas will pay approximately 18% more for their heating costs. With the economy in decline, the higher cost of energy is going to cause additional strain on the budgets of lower and middle-class consumers.
Low income families can receive subsidies through the Low-Income Home Energy Assistance Program. For middle class Americans there are no subsidy programs to assist them as energy costs continue to rise. American consumers need some immediate relief from the increasing cost of energy, but it is not realistic for the government to continue to provide funding indefinately to assist only low income consumers who need help. All of America needs a realistic long-term plan to reduce energy costs, increase clean and sustainable energy production to become energy self-sufficient and produce surplus energy to export.
During the latest presidential debate held on Tuesday, October 7, it was again clear to see that McCain's plans concerning the energy crisis involve nuclear power and increasing off-shore drilling of gas and oil. On the other hand, Senator Obama sees energy conservation and alternative energy sources, like wind and solar power as viable short and long-term solutions to the energy crisis.
McCain's plans for drilling are not helpful in the short-term, as it will take almost a decade after drilling begins to produce any oil. In the long-term the gas burned as fuel in American vehicles will damage the environment. And can nuclear energy really ever be "safe"?
Fiona Bowie
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http://pewsocialtrends.org/pubs/706/middle-class-poll
The address above is a link to some data about the "middle class"... 53% of Americans view themselves as middle class. Four out of ten people making under $20,000 classify themselves as "middle class". To put this in perspective, the threshold for poverty is between ~$10,000 and ~$11,000, depending on age (see http://www.irp.wisc.edu/faqs/faq1.htm for this data). For a family of four, it is about $20,000. Assuming that those who identify themselves as middle class aren't receiving energy subsidies, those nearer the $20,000 mark are really going to be hurting.
I would argue that those in the $50,000 to $75,000 range may feel it just as deeply, though, for a few reasons. This is the income bracket of people who aren't lucky enough to have much, if any of their income derived from favorably taxed capital gains. They have enourmous child care costs (see http://finance.sympatico.msn.ca/savingsdebt/insight/article.aspx?cp-documentID=6028862 ), and are getting nothing more than a tax credit at the end of the year in assistance, unlike their in-poverty conterparts. They also make too much (depending on family sizes) to get government paid health care for their kids, and they have the jobs with the most expensive health insurance costs comparative to income (see http://www.usatoday.com/money/industries/health/2004-03-16-healthcost_x.htm). Besides these two economic factors, there is the "keeping up with the Joneses" factor that the Bush Administration has not exactly discouraged with his patriotic argument for consumerism. Our middle class feels like they should look middle class, from the clothes they wear, to the cars they drive, to the homes they live in, and what's inside.
These factors, along with government policies that have allowed it (and businesses that were more than happy to exploit those policies), are why American consumers have record debt levels (see http://www.nytimes.com/2008/07/20/business/20debt.html# ) that even a $700 billion bailout seems unable to fix.
Why might this be? Seems pretty basic to me... The bailout is designed to "free up credit" for individuals and businesses ( see http://money.cnn.com/2008/10/03/news/economy/house_friday_bailout/index.htm?postversion=2008100309 ). How exactly are lenders going to lend money to people who are already grossly overextended, without just exacerbating an existing problem? And if businesses aren't already overextended, pumping borrowed money into it really isn't the smartest thing if there aren't going to be any consumers that can afford your product.
Unfortunately, the above true-life scenario is incomplete - We haven't factored in the ~$10 TRILLION national debt, or the $53 trillion in money that we have committed for the future but will not have (see http://www.reuters.com/article/newsOne/idUSN2250779920080822?pageNumber=2&virtualBrandChannel=10112 ). And then, what about the ongoing cost of Iraq?
Sadly, we are at this time trying to figure out how to keep the bottom from completely falling out from under us. The stock market hasn't exactly had a boost in stability since the bailout, has it? As a matter of a fact, you only have to visit the Wall Street Journal's home page ( http://online.wsj.com/public/us ) to find out that this was the worst week in the Dow's 112 year history.
This leads to another issue - this isn't a national problem. This is a GLOBAL problem. From what I know of history and of capitalism, it seems to me that a capitalist economy will be cyclic - It depends on constant growth, which, in the end, can't be sustained - At least not in the way that growth has been structured thus far, as consumer-driven.
Now, in 2008, middle class, and thereby, obviously, the low income population, must worry about how they are going to heat their homes this winter. In my mind, this is much too close to being about basic quality of life for comfort.
How can a middle class family(53% of the population, remember) endeavor towards human progress, by, say, sending their child (or themselves) to college, when a 15-18% increase in energy costs is a hardship? A Pell Grant comes very short of enough for all of the costs associated with a four year degree, let alone post-graduate education... And no matter how favorable they are compared to other loans, is a student loan really practical in an over-extended society?
Here's a thought... What if, instead of realizing record profits and rewarding CEO's with insanely gigantic bonuses, etc., U.S. businesses had invested that money into higher wages for their employees? Perhaps then, as profits grew, so would sustainable, non-borrowed spending? This is not necessarily a well-thought out idea, but off the cuff, it seems to make sense. If we combined this idea with one replacing consumerism with civic engagement, I think we could temper growth naturally, while maintaining wages that are simpatico with costs. If we further add into the mix a strong renewable energy industry, perhaps we will actually lower our energy costs from today's amounts, and bring in additional money from international consumers.
I don't know if either of these candidates has the best answer that could be found for solving today's problems. But at this point, I feel very strongly that Obama has a much better approach to finding out the answers, and is much closer to being on the right track than McCain. McCain seems stuck in the 80's, still fighting for the Reaganomics mentality to reign. It doesn't trickle down, because the people at the top build a damned good dam, and a reservoir we have little access to for the spillover.
-Heather Wegan
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