"We've been inundated since about August," said Mike Walston, who runs Good Samaritan Food Ministries for the Chattahoochee Baptist Association in Gainesville. "The number of people we're helping has about doubled. We're really getting kind of worried, because it seems like there's no end to it at this point."

The picture is the same at Cleveland-based Caring Hands Ministries, which serves Dawson, Habersham, Hall, Lumpkin and White counties.

"We're seeing double the number of people we normally would," said executive director Ann Fleming. "It's not really any one thing that's the tipping point for these people. It's a combination of things all piled together."

The misery began with gas prices, which shot above $3 a gallon in September 2005 after Hurricane Katrina and have bounced up and down ever since. At first, consumers were able to absorb the additional cost because everything else in the economy stayed the same.

But now, high fuel prices have persisted long enough that manufacturers of most products have been forced to pass along their transportation costs to consumers.

Price hikes have been especially noticeable for food, partly because of the search for alternatives to gasoline.

"Food prices are going up more than usual, because everyone wants to use corn for ethanol," said Rajeev Dhawan, an economist with Georgia State University.

On Tuesday, the Federal Reserve predicted the United States will see only mild inflation in 2008. But the federal government's main economic indicator is "core inflation," which doesn't count food or fuel, the two things people can't avoid buying.

The Fed's analysis also doesn't look at how much money people have available to spend. Over the summer, many homeowners were blindsided by the collapse of the sub-prime mortgage market. Some have already lost their homes to foreclosure; others will soon see their housing costs rise sharply when their adjustable-rate mortgages reset.

Frank Norton Jr., of the Norton Company real estate firm in Gainesville, said the problem hasn't been as bad here as in other parts of the country.

"Right now, we're tracking about 250 mortgages in Northeast Georgia that will be foreclosed on Dec. 2," he said. "That's slightly up over last December."

But even the perception of a problem can affect the market. "The national media is implying that houses aren't selling and there are no loans available," Norton said. "That's absolutely not the case here."

However, other factors have led to a construction slowdown, he said. For example, the high cost of fuel has forced suppliers to put a surcharge on raw materials, driving up the price of a house.

Incomes hurt by real estate bust, drought
The impact is especially stark in White County, where more people are employed in construction than any other industry except tourism and agriculture.

"Many of the people who are coming to us for help are construction workers who've been laid off," said Fleming.

Meanwhile, the flat real estate market is affecting charitable donations.

"Last year, we had 14 real estate people who each contributed $100 (to Caring Hands)," said Fleming. "This year, not one of them was able to contribute. One man told me he hasn't closed on a house since January."

Jackie Wallace, president of United Way of Hall County, said this illustrates the paradox that all charities face.

"When you do have an economic downturn, demand for services goes up," she said. "But at the same time, many of the people who would normally donate to the United Way can no longer afford to give. In fact, often they become recipients of services themselves."

While the entire nation copes with soaring oil prices and the bursting of the housing "bubble," Georgia faces an additional economic challenge: the drought. People whose jobs depend on water, such as landscapers or boat salesmen, have seen their incomes fall drastically over the past few months.

"We do have a high number of people who have lost jobs recently," said Walston at the Chattahoochee Baptist Association.

But that's not the impression one gets from reading Dhawan's latest economic forecast for Georgia, which was released Nov. 14. The report singles out Gainesville as one of the state's "star metro areas."

"In the third quarter of 2007, Gainesville increased employment by 3.1 percent, or 2,260 jobs, compared to the same quarter in 2006," the report says. "Looking forward, Gainesville will experience a strong 3.1 percent growth in 2007 and a slower 2.5 percent in 2008, consistent with the statewide economy."

Asked later if his analysis factored in the impact of the drought, Dhawan said he did not take that into account because it is an "unknown."

Norton said because the long-term effects of the drought are unpredictable, it makes people uneasy.

"The lack of water is creating uncertainty about the future," he said. "It's one of the layers of problems that are creating a perfect storm."

Many families ‘living on the edge'
For some people, the "storm" has already hit.

"We are seeing an increase in uncollectible bills due to foreclosures and bankruptcies," said Jeff Wilson, spokesman for Georgia Power.

Those unpaid electricity bills may continue to pile up, as Georgia Power has asked the state for a rate increase to cover the utility's environmental costs.

That's the last thing people need right now, according to Fleming. "Gas prices are already so high, and now people are panicking about (upcoming) heating bills," she said. "A scary thing I'm starting to see now is an increase in homeless elderly people. A lot of them paid high heating bills last winter, and then they didn't have enough money to pay the rent."

Fleming said many people have no financial cushion against unexpected expenses.

"The Census Bureau says the average American family is two paychecks away from being homeless because they have a lot of debt and no savings," she said. "Every little thing makes a difference to people living on the edge. It used to be you could buy three boxes of macaroni-and-cheese for $1. Now they're 45 cents each."

Debbie Wilburn, a consumer science agent with the Hall County Extension Service, said more people are calling her for advice on how to make ends meet.

"They're looking at how they can stretch their food dollars as prices go up," she said.

The Extension Service has started offering classes for low-income families, showing them that cheap food can still be nutritious.

"You can buy a pound of dried beans for 59 cents. That's the best nutritional bargain around," said Wilburn.

She said when household funds start running low, people first try to cut the most expensive items off their shopping lists, which generally means buying less meat. "They also stop eating out, cut back on convenience foods, and switch from national brands to store brands."

‘Lots and lots of ramen noodles'
White County resident Lafaye Murphy said most household expenses, such as rent and utilities, can't be changed. So low-income families have no choice but to reduce spending on food.

"If the price of gas goes up, you just have to cut back on your grocery bill," she said.

Murphy speaks from experience. She works part-time for Caring Hands, but in the past has been a recipient of the agency's services.

"I've been homeless before," she said. "About eight years ago, we spent several weeks living in a tent."

Even now, she has to watch every penny in order to make ends meet for herself, her husband, and their three children, ages 7 to 15.

"We just barely scrape by," she said. "When we do have money, we stock up on food for times when we have nothing. Thank goodness my kids like ramen noodles. We buy lots and lots of ramen noodles."

Murphy manages to feed her family of five for about $75 a week, mostly by buying generic brands and scouting for things on sale.

"But if the car breaks down or somebody gets sick, then we're in trouble," she said. "It's hard to ask family or friends for help because they don't have any money either. There aren't many good jobs here."

Part of the year, Murphy works in Helen, a tourist town with a seasonal economy. "From now until March or April, hours (on the job) will be slim to none," she said.
People who have never been poor, Murphy said, do not understand what it's like.

"I can't afford to take my children to a movie, or to buy their school pictures," she said. "We don't do anything unless it's free, and even then, we don't go many places because we can't afford the gas to get there."

The only way to increase their household income would be if she or her husband found a better-paying job. But that would most likely require commuting to another county. The family only has one vehicle, a gas-guzzling van.

Still, Murphy considers herself fortunate. "At least we're getting by," she said. "There's a lot of people having a rough time."

‘Just a bump in the road'
As the saying goes, the poor will always be with us. But in the current economic climate, even people who consider themselves middle-class are starting to feel the crunch.

"Many of us are maybe just a hair away from being in a position of struggling ourselves," said Gainesville City Council member George Wangemann, who works part-time at a dental lab.

"In my family, we've had a lot of discussions about what's a luxury and what's a necessity. We're talking about getting rid of cable TV and Internet. We're also using more coupons and checking out the sales ads."

Dhawan said despite the hardships that some people may be facing, there's no indication that this is a long-term trend.

"We are not tipping into a recession," he said. "This is just a bump in the road."

But one person's "bump" is another one's mountain. Fleming said she doesn't understand why economists aren't acknowledging that there are real problems.

"It is indeed very frustrating," she said.

Whether you believe the economy is in trouble or not depends on which set of numbers you look at. While economists examine broad indicators such as growth and productivity, there are other numbers that tell a more personal story.

For example, the number of local folks who can't afford to buy food. According to the Georgia Department of Human Resources, during the first nine months of 2007 almost 4,900 people applied for food stamps in Hall County, compared to 4,562 for all of 2006.

Other numbers point to a deepening divide between the haves and have-nots. According to a recent analysis of U.S. income-tax data, the income of the average American has grown about 26 percent since 1980. But that "average" is skewed by extremes at the upper end.

For the bottom 99 percent of the population, income grew only about 8 percent. But for those wealthy enough to be in the top 1 percent, income increased by 177 percent. And for those in the highest tier of that select group, income has ballooned by 408 percent.

Meanwhile, much of the average person's income is being eaten up by health-care costs.

"We're seeing more people with high-deductible plans who are responsible for a larger portion of their bill," said Martha Blount, director of patient accounting at Northeast Georgia Medical Center.

‘It's a vicious circle'
But they're lucky to have insurance at all. Most of Fleming's clients have very little access to health care.

"Because of a lack of health insurance, people let things go," Fleming said. "I have a client whose elevated blood sugar didn't get treated. Now she has kidney problems and may lose a toe (due to diabetes)."

And solutions are never as easy as they seem. "The $4 prescriptions at Wal-Mart are great," she said. "But you have to see a doctor in order to get a prescription."

Once someone gets on the treadmill of poverty, it can be almost impossible to get off. Without transportation, the person can't get to work. Without a decent job, they don't have medical insurance. Without health care, they may develop chronic problems that, again, make it difficult to get or keep a job.

"It's a vicious circle," said Fleming. "Each of these things makes the other things worse."

While no one is suggesting that another Great Depression is around the corner, just about everyone who is not in the upper-crust 1 percent is starting to feel the pinch of a strained economy.

"I think we are all becoming a little more value-conscious," said Norton. "We're trying to squeeze a dime out of a nickel."