Stimulus Skepticism

This week, President Obama and his team will convene for an economic summit, and Democrats in Congress are already pushing for a new stimulus bill aimed at boosting employment. But the polls suggest Americans are skeptical about additional stimulus spending. The first stimulus was poorly designed, and Americans aren't confident it is working.

With unemployment above 10% and likely rising, opinion surveys provide ample evidence of the economic pain. The University of Michigan, which has produced a monthly index of consumer sentiment for more than half a century, reports that consumers' assessments of their own finances "have been the grimmest for the longest period of time in the history of the survey." In polls this fall, around three in 10 have said they or someone in their family has lost a job in the past year. Two-thirds in the latest polls know someone outside their family who has lost one.

A new ABC News/Washington Post poll documents the personal distress. Ninety percent of those who have experienced a job loss in their household said it has caused stress, 86% have said it has caused financial hardship and 58%, depression. The poll provided a glimmer of hope in that four in 10 of those who had lost a job in the past year had found another one. Of that group, however, a majority, 51%, said the pay in the new job was worse, and around one-third said it was about the same. Only 15% reported better pay.

Americans aren't approaching the holiday shopping season thinking the worst is over, but there are some hopeful signs.

Initially, Americans reacted positively to the stimulus, but their verdict has grown more negative over time. Majorities in almost all polls in December 2008 and January 2009 favored it. But as early as March in a CNN/Opinion Research poll, only 32% said they would favor "another bill that would increase government spending even further to stimulate the economy," while 66% were opposed. In an August Gallup poll, 29% favored Congress passing a second additional stimulus plan, with 65% opposed.

Washington's spending spree and the lack of concrete results--i.e., jobs--have dampened enthusiasm. In the new ABC/Post poll, 39% said the bill had made no difference for the national economy, 37% that it had helped it and 23% that it had hurt it. In a new Harris Interactive poll, 8% rated the job market in their region of the country as good, 73% as bad. Most people said the stimulus bill hasn't helped them personally.

The implications of the public's attitudes are serious for the president as he heads into an election year. In two new polls, Quinnipiac and Gallup, the president's overall rating is now barely 50%. His marks on handling the economy are worse: 43% approved of his decisions in the most recent Quinnipiac poll, down from 57% in March. In a CNN/Opinion Research poll, 36% said Obama's economic policies had improved economic conditions, but almost as many said they had had no effect (35%) or made them worse (28%).

Though the president's slide looks ominous, Republicans aren't doing any better. In the ABC/Post poll, 52% trusted Obama to do a better job handling the economy vs. 37% putting their trust in the GOP. On a broader question about the "main problems the nation faces," the Democrats had a 16-percentage-point edge over the Republicans, 47% vs. 31%.

Americans aren't approaching the holiday shopping season thinking the worst is over, but there are some hopeful signs. In the ABC/Post poll, 44% said that, in terms of their own personal experience, the economy had begun to recover. Furthermore, in a new Harris Interactive question, 54% of those surveyed expected their economic prospects to improve over the next five years, while only 15% expected them to get worse. So while Americans' faith in Washington's solutions thus far to our economic distress is lacking, the reservoirs of American optimism about their own abilities to weather the difficulties remain deep.

Karlyn Bowman is a senior fellow at AEI.

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