Thursday, June 26, 2008

The American Spaghetti Crisis: Part 1

While the world's eyes are focused on the global rice shortage, skyrocketing rice prices, and how it is affecting 3rd world countries, there is another issue that seems to have slipped by relatively unnoticed: the skyrocketing price of pasta in the US.

Over the last year there has been an extreme increase in the price of spaghetti and most other macaroni products. In some cases it has been an almost 300% price hike.

Around this time last year, I was able to purchase 3 packages of spaghetti for $1, regular price. Now I am lucky if I can get 1 package at that price, on sale.

And the price for a box of macaroni & cheese has gone from $0.49 to $0.89..

A case of ramen used to be $1.99. It is now $2.50.

All of this within the last 12 months.

While rice may be the staple food for the poor in many 3rd world countries, pasta is also a food heavily consumed by the poor, in the US. And even though the price of rice has increased drasticly, it is still by far much cheaper to buy than spaghetti currently is.

I believe that it is quite possible that the rising cost of macaroni products can make the global rice shortage even worse than it already is, as more lower income families switch from pasta to rice, to save money, thereby increasing the demand for rice.

What is even worse, is that the rising prices of food in general will cause a rise in prices that restaurants charge for a meal, causing more middle income families to eat at home rather than going out to eat. This loss of business to restaurants translates to a loss of jobs and income for many lower income families that depend upon minimum wage restaurant jobs to support themselves.

The poor that rely on the Food Stamp program are running out of money before the end of the month because of the increase in food prices, but no cost of living increase in their monthly allotment of funds. They are being forced to turn to local church run food pantries for help feeding their children.

Pasta is a staple of many local food pantries that supply the poor with free food. As prices go up, the poor can afford less, and rely on these food pantries more & more to keep from starving. And as prices go up, donations made by the middle class to these food pantries decreases, and then they don't have enough to meet the demands of the poor they are feeding.

Poor children are eating cheap, high fat, high sugar, low nutrient junk food to keep from being hungry. They are not getting the nutrients they need to grow strong & healthy. They are getting sick and missing school more. The ones that are in school are too busy thinking about their growling stomachs to pay attention to their work. Their health & education are sufferring, and they will pay for it in the future by never acquiring the means to rise above their current poverty status. At the same time, as a result of bad nutrition, they are becoming a bigger burden to the free government provided Medicaid healthcare system, that is paid for by the tax dollars of the middle class.

And why exactly are the food prices so high? Could it be the price of gas affecting the shipping costs and driving everything higher? Could it be that the economy really sucks right now and businesses are raising prices in order to turn a profit and keep their doors open? Bad weather killing off crops? A combination of things?

Whatever the reason for the increase in prices, this much you can be sure of: the prices are not going to come back down, whenever the problem that is driving the increases goes away. I have never known a business to lower prices after an economic slump. They usually just keep them at what they are, raising them again when the next crisis hits, that eats their profits. Your dollar is shrinking fast, and it's likely to stay shrunk, even when the economy improves.

The amount of low income families in America is increasing, the bar that marks the poverty level is rising, the middle class getting smaller as they slip down below that bar, the number of elderly increasing, the amount of tax dollars needed to support social services & healthcare for the poor and elderly increasing, the amount of tax dollars available to fund it all decreasing, the amount the middle class needs to make ends meet increasing, the amount in their paychecks after taxes decreasing.

This is a serious long term crisis, and a $300 economic stimulus check ain't going to fix it.

Read More:
American Spaghetti Crisis: Part 2
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