Well, now I understand why there hasn't been a downturn in spending despite rising gas prices, at least pre-Katrina:
U.S. savings rate falls below zero
Personal incomes increased 0.3% in July, while spending soared ahead by 1%. As a result, the personal savings rate tumbled to negative 0.6%, the lowest since monthly records began in 1959.
Quarterly data show negative savings rates for several quarters during the Great Depression. The savings rate was negative 0.2% in October 2001 and was 0% in June.
Negative savings rates are possible if consumers spend by selling assets, dipping into savings or borrowing against future income....
Clearly that's what's going on -- clearly people are assuming that their homes will continue gaining value forever, so they can spend and spend. But how much longer are house prices going to go up? Especially if the fastest-growing communities require long commutes to center cities and gas prices are $3.00-plus a gallon?