Bankruptcy & Foreclosures

Boy just as the economy starts to show signs of strengthening oil prices reach a record high as the US dollar plummets against global currency (particularly against the euro). While I would like to offer some explanation to these unfortunate trends, the truth of the matter is that even our government struggles to isolate the economic woes themselves. About the only positive spin to the ever-rising oil price situation comes in the form of new tax legislation, which would collect some $18 billion in new taxes on the world’s largest oil companies. These proceeds would then provide tax breaks for wind, solar and other alternative energy source research and for energy conservation. While the new tax would zap a healthy $1.8 billion annually from the top five oil companies, keep in mind that they earned $123 billion last year alone.

Interestingly, the bill would roll back two lucrative tax breaks for the five largest U.S. oil companies, which save the companies close to an estimated $20 billion over a ten-year period. Critics of the bill claim not only that it unfairly targets the oil industry but also additional taxes will only cause increases of the price per gallon we pay at the pumps.

Sadly, analysts are already predicting costs as high as $3.50 per gallon for most of the nation this spring with some areas hitting prices as ridiculous as $4.00/ gallon! Not only does this hurt each of us as we fill up our cars, trucks, and SUVs, it also pushes up the cost of food thanks to increases in transportation cost. The squeeze to the individual consumer is coming in from multiple angles. Aside from the costs mentioned, housing prices are tumbling (meaning less available equity for many) and banks are tightening up their lending practices. The icing on the cake is the diminishing value of the US dollar. All in all, efforts to stimulate the economy through interest rate cuts and tax rebates are viewed by many as band-aid fixes to deep-running wounds.

I really don’t enjoy posting bad economic news but feel like American consumers can benefit by realizing the severity of these tough times. My goal with this blog is to provide advice in the categories of debt management/ budgeting but often times the best advice is to simply step away in the hopes that the economy will rebound. In the mean time, about all we can do is keep these bleak forecasts on the backburner with our spending habits in daily life. We often discuss plans and strategies for a rainy day and this could very well be the start of the downpour.