Blog Post Date: Oct 19, 2005

Blog, School

How do recessions begin? Recessions start when people start to get into conserving mode. Spending less on gas, and then less on automobiles, and then less on travelling.

With all of the news about Hurricane Rita and how people are cutting back, it's no wonder that people may be in the mood to start conserving a little. The governor of Atlanta keeping kids home from school for 2 days to save 500,000 gallons of diesel fuel. That sends a huge message across to people in Georgia, but also all across the U.S. and Canada. (It's shocking to learn that 2 days of school uses that much diesel fuel.)

Gas prices are going to rise after Hurricane Rita. That is definitely going to cut into lower income people's discretionary income. They may have to start buying less consumer goods.

There seems to be talk about how the government can conserve money. Can we save money here? Can we save money there? Saving money means a conserving mentality. Once you start asking how you can save, you start spending less money, and especially on luxury items.

If gas prices are that high, you're probably going to think twice about driving across country to go to Disney Land. You're probably going to think twice about travelling on the following because prices are going to skyrocket:

• Cruise Trips -
  
• Airline Trips
  
• Train Trips
  
• Car Trips

If you're not travelling, it's going to put a dent in the hospitality industry, including hotels and restaurants.

Gas prices may only affect decisions made by lower income people. They will be more sensitive to price increases. If you've got to choose between purchasing gas for your car, and food for your family, you're going to choose your family.

I'm wondering if the hurricane disasters as going to make people think conservatively.

By Monty Loree - Financial Maturity blog - Topic - Recession - conservative thinking.

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