Posted on 07/25/2022 7:14:41 AM PDT by BenLurkin
Inflation is crippling rural America and driving some people to consider moving closer to cities in an effort to ease the financial stress, according to the latest analysis from one expert.
Iowa State University professor Dave Peters has been studying the effect of inflation on people in rural communities as part of the school's Small Town Project. He found that this year alone, expenses for rural Americans had increased by 9.2%, but their earnings only increased by 2.6%.
And Peters has pinpointed where it's hurting most.
"Mainly, fuel prices, particularly among the farmer and agricultural community," he said. "They really are worried about the price of gas and diesel."
Inflation soared to a 40-year high in June, and is affecting all American households. But Peters said travel was one of the main reasons it was hitting harder in rural areas.
"Rural people have to drive long distances for work, for school, for health care, just to get the daily necessities of life like groceries ... there is no public transportation," he said.
His analysis found it costs rural households $2,500 more a year to pay for gasoline than it did two years ago. At the same time, prices are also rising for health insurance, veterinarian care, and fuel to heat homes.
"Most rural homes have to buy tanks of liquefied petroleum or liquefied propane, or they have to get fuel oil," Peters said. "And those have really risen in costs as well; that's, I think, something like $1,000 more."
In response to the June inflation figures, President Joe Biden said tackling the issue was his top priority.
He said the administration would continue to release oil from the strategic petroleum reserves in an effort to bring down gas prices, and that he would "continue to give the Federal Reserve the room it needs to help it combat inflation."
"Inflation is our most pressing economic challenge ... we need to make more progress, more quickly, in getting price increases under control," he said in a statement.
The Fed is now attempting the delicate task of lowering inflation without driving the economy into recession, and is expected to raise interest rates for the fourth time in five months when it meets later this week.
"The Fed slows the economy down by raising interest rates, which cuts spending," Princeton economist Alan Blinder told NPR. "If you do too much of that, you're going to get a recession."
Peters warned that if prices stayed too high for too long, it could start a dangerous cycle for some rural Americans.
It begins with people dipping into their savings, which Peters said was already happening. Next, they will be forced to use their discretionary money on essential goods; and after that they will go into debt on credit cards.
But what really worries Peters is the idea that some in rural America will then start taking out home equity lines of credit because the value of their homes has increased, especially in the Midwest region. But he warned this strategy could backfire.
"That's particularly dangerous if home prices fall back down and then they're left with a mortgage that the value of their home doesn't cover," he said.
This combination of factors was driving some people in rural areas to consider moving closer to cities, Peters said. But it's complicated.
"There are people that I've talked to in Iowa and in Nebraska ... that are really trying to do that financial calculation," he said. "They would love to work and get city wages, but they can't commute. It's too expensive with the gas prices. And really, the thing that's holding them back is the cost of homes."
"Some people are contemplating moving closer to a city, moving to the suburbs, or moving to a small community 45 minutes from a city. So yeah, it will probably, if it continues, accelerate rural depopulation in parts of the Midwest and Great Plains."
Rural America is the source of our food production and small towns support the farmers who produce our food. If there is a migration from these rural areas it cannot help but lower food production. Perhaps the Marxists who run the Biden Administration will force food production into government run collective farms. Those worked so well in Russia and other Communist countries.
Lol - this is nonsense. In rural areas I can buy meat, veggies and dairy straight from the source. Or better yet barter for it. In the cities you are stuck with what’s on the shelf and pay with your inflated dollars.
This is utter BS. People are leaving cities, skipping the near suburbs and going to smaller towns miles away from the inner city.
Schools, schools, schools. People need good schools for their kids. Few good schools can be found in cities.
Yes there are wealthy areas in most cities where people have $25,000+ each year to send their kids to private schools. If you have three kids that’s like buying a Mercedes each year then giving it away to some lucky person at the end of May.
Most people cannot pony up that kind of cash each year for every child they have...that’s roughly what out-of-state tuition is for most state universities in the mid-west and south. That’s a lot of gas money.
No, we don’t want your big, Democrat-run cities. Dream on “expert”.
Rent is crippling in the cities. I can’t believe how bad it is.
I can’t quite put it into words, but I see this as a sort of echo of the old Enclosure movement in England. People lived in villages, and shared common land for the benefit of their local community. Then things changed and the land was increasingly bought up by great landowners. Soon after, industrialization starts up, life in rural communities isn’t good at all, people have no choice but to move to cities and work in dangerous factories.
People can see that as “progress” from living in a 16th century village to a modern industrialized nation, but what I see happening right now seems vaguely similar and not at all good.
Clearly, the author of this screed knows nothing about which he speaks. Neither does that twerp Iowa State University Professor. The VERY LAST PLACE you want to be in the end times of government incompetence and pathetic attempts to appear to correct their screwups, is in a big city with all the rest of the soon-to-be recession zombies. Cities will be the first to go because they are AT BEST only 2-4 weeks away from supply/sustenance disaster until all hell breaks loose.
If you dwell in a tent on public land, rent is free
Exactly. And they and their donors are waiting in the wings to snap up all the land when the time is right.
Way to go, NPR. Cover for the Dems. Lie, cheat, obfuscate and more!
I actually think it is the opposite. All of the uncertainty is driving people out of the cities - not to mention the increase in crime.
You and me both. I would rather live in a tent in the boonies.
Good luck competing with Invaders that have NGOs subsidizing their rents.
“The plan is to turn us into renters and serfs.”
After owning homes for 30 years, in 2016 I decided to rent. This will be my last rental as it is now costs less to own a home and pay a mortgage. Especially a VA mortgage where I do not have to put any money down.
Not at all, why?
Sorry, you must have meant the article, not my comment.
If you lived in a city since 2020 and haven’t left yet and saw interest rates rising, this would be the “Everything is Fine” article you would write before you sold your condo to a sucker and disappeared into the night.
If you lived in a city since 2020 and haven’t left yet and saw interest rates rising, this would be the “Everything is Fine” article you would write before you sold your condo to a sucker and disappeared into the night.
Shouldn’t be called the Strategic Petroleum Reserves, it should be called the Desperate Conniving Democrat Reserves, because Republicans always fill them up in case there is a national emergency, while Democrat presidents always empty them out in election years whenever they have a political emergency and need to prop up their failing economic numbers.
Exactly, nothing will make the good people in the rural areas move to the rat controlled cities. NPR is a cesspool.
“The plan is to turn us into renters and serfs.”
Add make people move into the cities where they can track and control people like China and Russia does.
In China they have party members on each city block that is responsible for monitoring residents.
Easier to control your citizens if they live in the cities. In China, the cites have cameras that use face recognition software and phone app to identify the movements of citizens. Soon you will have AI using those cameras to track enemies of the State.
If you get flag for Covid in China, you cannot travel, they are doing to this to keep the number of bank protestors down. Today’s technology enables enforcement and control of the people.
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