Americans in 70% Majority See More Jobless in Poll
Wednesday, July 14, 2010; 12:00 AM
July 14 (Bloomberg) -- More than 7 out of 10 Americans say the economy is mired in recession, and the country is conflicted over how to balance concerns over joblessness and the federal budget deficit, according to a Bloomberg National Poll.
Just like the experts, Americans are torn about whether the federal government should focus on curbing spending or creating jobs, the poll conducted July 9-12 shows. Seven of 10 Americans say reducing unemployment is the priority. At the same time, the public is skeptical of the Obama administration's stimulus program and wary of more spending, with more than half saying the deficit is "dangerously out of control."
This concern over spending extends to aid for the jobless. With unemployment at a near-record high of 9.5 percent in June, the public is closely split on whether another extension of jobless benefits, which is stalled in Congress, is worth the $34 billion cost.
"They're just running out of patience," says J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based company that conducted the survey. "The number they're seeing change is the deficit. It's rising at what seems like an astronomical rate. The number that seems intractable is the unemployment rate."
The Obama administration expects a record budget deficit this year of more than $1.5 trillion, or 10.6 percent of GDP, according to projections the White House released in February. The U.S. deficit is a greater percentage of GDP than any other major industrialized nation except the U.K., where it is estimated to reach 11.4 percent, and Ireland, where it will be 12.2 percent, according to International Monetary Fund projections released in April. The only deficit-reduction measure that gets strong support in the poll is higher taxes on upper-income Americans.
The public's perception that the U.S. is still in recession contradicts data showing the economy has been growing for a year, with the Commerce Department reporting GDP rising at 2.7 percent annual rate in the first quarter. The median forecast in a Bloomberg News survey of economists conducted July 1-8 shows 3.2 percent growth for the second quarter.
Four months ahead of the midterm congressional elections, the poll's results show a challenging climate for Democrats. The public mood is bleak, with 63 percent saying they believe the country is on the wrong track, the most negative reading of Obama's presidency. After a year of economic growth, 71 percent say the economy is still in recession; another 13 percent say the economy is faltering and will dip back into recession.
Only 1 in 6 say they believe they are personally better off than they were 18 months ago, when President Barack Obama took office. They are more apt to see the economy today as deteriorating than improving.
More than half say they are responding to the economic climate by hunkering down. Fewer than a quarter say they are getting back to normal and only 16 percent are seeing opportunity and taking risks. The public's posture is more pessimistic than the view of global investors polled a month earlier. In a poll of Bloomberg customers conducted June 2-3, more than twice as many respondents -- 35 percent -- said they are seeing opportunities and taking risks.
The divergence in the outlooks of the general population and investors fits the way each group is experiencing the economic cycle. The public confronts an unemployment rate hovering near a 26-year high, home values and retirement portfolio balances that remain below pre-recession levels, and the debt crisis in Europe that threatens the global recovery.
The public's perception is gloomier than some recent economic data: The U.S. economy has been growing for a year, first-quarter corporate profits were up more than 33 percent from a year earlier and research published in 1980 by Federal Reserve Chairman Ben S. Bernanke points to the possibility of "an investment boom" following resolution of uncertainty such as the jitters provoked by the crisis in Europe. In addition, investors have benefited from a rise of more than 36 percent in the S&P 500 stock index since Obama took office even after the recent turmoil in the markets.
The public gives the Obama administration little credit for its tax cuts, which according to the Washington-based Tax Policy Center lowered federal income taxes for 93 percent of filers. Asked to compare their federal income taxes to what they paid during George W. Bush's presidency, only 7 percent say they are lower; 20 percent say their taxes are higher and 65 percent say they are about the same.