My performance review coincided with the end of year, so it is easy to do some year-over-year comparisons.

Income for 2006

2005 Income
+ Merit Raise
- Higher Medical Witholding
- Higher Gasoline Prices
- Higher Natural Gas Prices
Less than 2005 Income

With just a couple variables, you can see that my household will have less disposable income in 2006 than we did in 2005.

If you count the more general (and inevitable) price increases in food, clothes, and other household goods, then it is easy to see that my household will be working harder to make ends meet in 2006, in a noticeable, non-trivial way.

Something is going to be cut.

And I know that I’m in better shape than most, so I’m not in a riotous mood yet. I’ve still got a number of notches left on my belt to tighten.

But for millions of households across America, I’m certain 2006 will represent a significant decline in standard of living over 2005.

The only way to hide this problem is to fund the current standard of living on the credit cards, which we seem to be doing in record numbers, judging by the record consumer debt in America. This shell game won’t last.