On Thin Ice

October 12, 2023

by Charles Hugh Smith Of Two Minds

There is very little wiggle-room left in many household budgets, and any decline in income will crack the ice.

A recent article on a well-worn topic–the rising costs of vehicle ownership–caught my attention. How the Costs of Car Ownership Add Up (New York Times). There’s nothing particularly new revealed in the piece, or particularly surprising for anyone who has 1) shopped for a new vehicle 2) shopped for a used vehicle 3) had their vehicle repaired or serviced recently 4) fueled up at a gas station or 5) paid auto insurance.

The most striking point was not explicitly said: these astounding increases in costs are putting many American households on very thin ice financially. There are plenty of statistics saying the same thing: a large percentage of Americans are living paycheck to paycheck and have less than $1,000 in a rainy-day / emergency fund, wage increases are lagging the soaring cost of living, and so on.