Running On Fumes

This past week the price that investors pay for crude-oil futures slid upward to more than $140 per barrel. The significance of the increase will accentuate the hardships of parents who transports kids to school events, charitable organizations whose volunteers deliver essentials to the needy, school districts whose bus expenses have already put thoughts of putting the lives of children at risk by making them walk to their schools, pizza delivery employees whose tips may be insufficient to warrant the limited monetary compensation they already receive… and residents of Hernando County who work outside the area.

The pay may be an attractive draw to seek and maintain employment in Pasco and Hillsboro Counties, but these commuters are going to be hit hard in their pocketbooks. With the cost of most everything else going up and the challenges of paying property taxes and homeowner insurance premiums there’ll little left to spend on what the Federal Governments expects from citizens to spur the economy.

The only means of people to purchase anything other than the essentials for their families will be by credit card. The Fed can lower the prime rate to zero and you can bet your life savings that interest rates on those plastics devils won’t go much below 15%. Heck, even with an excellent credit score, the worst culprit of my credit purchase woes is Bank of America. Others are currently charging less but those introductory rates have an ending date that I may not remember and, worse, the loan holders doesn’t supply on the monthly statements.

There are many Americans whose credit ratings put their interest rates above 20% or default rates that even higher.

Let me go back a few paragraphs where I mentioned there are a good number of Hernando County residents working outside the area. Their numbers equal about 34% of the County’s residents. Let’s say the average commuter put 40 miles on their vehicle to get to work, double that for a round trip then multiply by the 5-day workweek. That’s 400 miles per week.

The cost of gas is currently $4.00 or more per gallon. The vehicle gets 25 miles per gallon so the expense in gas would be $100 every month. The cost of car maintenance and repairs will surely go up but can’t be avoided to keep the machine at its best performance.

If there are thoughts of a new vehicle, forget it. The cost of my auto insurance just went up 10% from a year ago – no tickets, no accidents, no claims. A ’95 truck and an ’03 car. The telephone rep explained the increase was due to the cost of repairs and/or claims in the County. I didn’t feel safe in lowering the coverage so I fudged a bit about my estimated annual mileage.

If you think the cost of gasoline couldn’t get much worse, take into consideration that investors in oil futures expect the price of crude to reach two hundred dollars - $200 by the end of 2008, easily making the cost of gasoline go up another dollar. As the cost of petroleum goes up, so do the prices of nearly everything we Americans take for granted. And, as prices go up, the Dow will go down.

Whenever anyone suggests the slump in the economy will correct itself in a couple of years, I just don’t see it happening. After a dismal December for retail stores, January figures showed a pitiful gain of .4% - just a little more than nothing. Then I read that retail sales include gasoline. Without the increase of the price of gasoline, retail sales would have been less than zero over the prior month!

In a county that relies on retail, construction and property tax revenues, Hernando County has three strikes against its economic well-being. With a new administrator or not, there are some hefty challenges in the foreseeable future. It’ll be quite some time before new homes are built, thus construction laborers will have plenty of idle time in their lives to do whatever else is available to give them entertainment.

Workers are often displaced for lack of need in their chosen fields of employment and must seek other endeavors to achieve a measure of success in their lives. It’s a rude awakening but when survival is at stake. Only the brave and venturous shall inherit the paycheck.

The Hernando County Board of County Commissioners and their “constituents of interest” need to get off their doo-dads and plan for a future that replace ho-hum doldrums jobs with ones with real-time wages. Without the guidance and consideration of any and all the people of influence in Hernando County, a solid economic future cannot be resurrected from the past decade of housing growth.

At one point the County had a tank full of gas - now it’s running on fumes, about to stall out.