Prime Rate Credit

In yet more ominous news about today’s economic situation, both microeconomically and macroeconomically for those who enjoy referring back to old highschool and college terms, unlike me, foor prices are being forecasted to go higher than they have in more than 17 years, and they are saying that right now is just the beginning.

What are the higher food prices attributed to? Well, it is supposedly a combination of factors, a few being the weather in major food, wheat and corn producing areas of the world, high gas prices which increases the cost of transporting food to places that sell it and use it in their food products, and a higher global demand for food stuffs.

The average annual food cost increase is usually at about a 2.5 percent increase, while last year (2007), it rose around 4 percent, setting the path for higher and higher prices according to many analysts and consumer watchdog groups. This year, they are saying that the rise in food prices could be even worse than last year, and additional half a percentage point again, rounding it out to about 4.5 percent increase.

It doesn’t seem like a lot, but when you consider this is an incremental increase that happens every year, and we are talking on a global scale here, it certainly does add up. These increasing percentages are bound to strap several working classes, but will especially strap the poor financially, making food donation programs and subsizdizations a virtual necessity just to feed our own population. Or the poor class will be forced to give something else up in order to eat properly.

I’ve noticed higher prices on fruits and veggies so far, but the squeeze hasn’t hit me nearly as hard as I know it could hit others who are having a tough time paying their bills and keeping up as it is. McCain, the Republican presidential nominee, has actually just proposed a gas tax holiday, which would take away gas taxes, which make up a significant portion of what you pay at the pump, for the coming Memorial day weekend, hopefully easing some of the financial burden on families and businesses. I’d say much more drastic measures are called for, but this would at least be a start. Heck, it would make McCain a pretty popular guy too!