the rise of living costs= the downfall of 'economy'

This 'economic' crisis is a product of it's own cause.
It's not 'oil' prices or People not buying their own countries produce and products.
It's people simply not being able to.

This article(again up @ Fark.com, I'm getting lazy): http://www.city-journal.org/2009/eon0806em.html

It talks about living costs compared to other areas, Newyork compared to Chicago and Washington.
And the biggest Problem is housing.

Has any research been done like that here? I'm going to find out.
It's rediculous, If price of housing and fuel go up, people are going to spend less at the shops and bunker down.

EG: I'm paying $250 a week rent, I'm on Centrelink and so is my Father(DSP) and that's a huge chunk out of our payments. We don't do much anyway.
But considering the 'condition' of this property I should be paying a lot less.
IF things like rates on loans, and essential services were lowered in 'times of crisis', the economy would recover a lot faster than when Essential service providers have their prices jacked up in order to 'ride out the economy'.

But if the economy relies on people buying things, should essential services and accommodation be made cheaper? or better, subsidized temporarily by government?