by Thomas Mackert

Created on: May 22, 2008

Most economic analysts would suggest that the U.S. is either in or close to a recession. There are many factors that support their claims. While the price of oil would be the largest and most obvious problem to point out, there are plenty of other contributing factors as well. The loan scams that recently crippled the housing market combined with higher minimum payments on credit cards has also handcuffed the consumer. Include the severely weakened U.S. dollar and the massive trade deficit and it would be hard to dispute the analysts claims.

With gas prices jumping from approximately $2.50 a gallon almost one year ago to over $4.00 a gallon currently in some states, it would be hard to argue that the price of oil is not the largest contributing force behind a slowing economy. The effects can be as obvious as the price of gas at the pump, or the not so obvious fuel surcharges that are now attached to almost every product and service available. Many Americans do not understand that fuel surcharges passed on by the transportation industry eventually land at their feet with higher prices on such goods and services. While the U.S. government has attempted to negotiate with OPEC and other oil producing nations for ways to deflate overall oil prices, little or no progress has been made. Meanwhile, the U.S. congress instigated hearings with major oil companies to explain the recent financial win fall in the amount of tens of billions of dollars in profits. Congress also questioned why said oil companies would continue to require federal tax breaks intended to slightly increase their profit margins. The hearings concluded with no solutions as well.

While the price of oil has been an issue that has affected all Americans, nothing has had a greater impact on the American middle class than the recent loan scandals as well as the choice by the federal government to force credit card companies to increase the minimum monthly payments of their clients. Within the last decade some mortgage and lending companies decided to venture into loaning monies to higher risk individuals who would not (prior to that time) qualify for such a loan. At one time there was a firewall in place to prevent banks and investment companies from becoming unified. However, after vigorous lobbying by said companies, it was at some point removed. Most of the consumers that purchased homes with the adjustable rate mortgage offered were eventually pushed into default because of increasing payments, with

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