You have to feel for the babies, but you know parents must be getting desperate when they cut back on diapers.

According to the Wall Street Journal, consumer-goods companies “are seeing something they thought would never come to pass.”

Diaper sales are plummeting. Across all categories: brand name, generic, bulk and so on, sales are down. And it is not because some new diaper technology has made obsolete perhaps the best invention since discovering that rubbing two sticks together makes fire.

It is a sign of how bad the economy really is. Even survivalists—end-of-the-world-type survivalists—commonly list diapers as potentially one of the most sought-after luxuries in a post-Walmart world.

But before you feel too sorry for the diaper companies, consider: They may be taking a bath on diaper sales, but they are making a killing selling rash ointment. Sales are up 8 percent for the year. Why? It’s a result of less-frequent changes.

“We’re definitely seeing major effects of the economy,” says Daniel Taylor, a pediatrician in Philadelphia. “Diapers are very expensive, and the longer you sit in a dirty diaper, the more likely the chances of an infection.”

The biggest spikes in diaper rashes appear to be in inner cities like Chicago and Philadelphia, a sign that even in neighborhoods that are massively subsidized by social programs, people are struggling more than usual. It is a choice between diapers and paying for food and heat, says Taylor.

With unemployment so high, and wages that haven’t budged in a decade, for many people there is just no room for error.

A September national poll found that one in three Americans would be unable to make their mortgage payment or rent beyond one month if they lost their job.

Millions of people are living on the edge. And it is not just poor people.

A whopping 10 percent of respondents earning $100,000 per year or more said they couldn’t even cover one month if they lost their job.

America is living in a new “trickle-down poverty era,” writes the Oklahoman’s Malcolm Berko. During the decade from 1997 to 2007, consumers took on more debt than they had for the previous 100 years combined.

The government led the way. George W. Bush added $1.5 trillion to the national debt in his first term. He added another 3 trillion in his second. President Obama is on track to add as much debt during his first four years as President Bush did in his eight disastrous budget years.

Now the economy has turned. Credit is not being expanded. Debts need to be paid back. This generation “will have a lower standard of living than their parents”—that is just how it is going to be, says Berko.

In Highland Park, Michigan, the city is literally going dark. dte Energy has repossessed most of the city’s 1,400 light poles, and is selling them for their scrap metal value, as part of a settlement to cover $4 million in past-due bills. Residents report crime is already rising.

Money issues are so bad in Topeka, Kansas, that as of September 8, officials stopped prosecuting domestic violence cases in order to save cash. The District Attorney’s office said it would also no longer prosecute any misdemeanors. The city code that bans domestic battery will probably have to be repealed. So far, 30 cases of domestic violence have been dropped.

In Georgia County, Florida, officials are mulling letting inmates staff firehouses. “The inmates would have no guard, but would be monitored by a surveillance system and by the traditional firefighters, who would undergo training to guard the inmates,” reports the Florida Times-Union. The move would save the county up to $100,000 per convict. California already has 4,000 inmates serving in firehouses.

Cities going dark. Law and order going unenforced. Criminals released from jails. Even upper-class people living paycheck to paycheck. $15 trillion national debt. How bad does it have to get before people realize that prosperous pre-2008-economic-crash America is not coming back anytime soon?

In fact, America’s economic condition will get much worse before it gets better. Cutting back on diapers will be the least of people’s worries before this is all over. But cuts are coming. And in the short term, cuts are always painful.

Prepare now to reduce your standard of living. Do it today.