America Now 57% Less Stupid than Previously Thought

This just in from one more group of pollsters.

A USA TODAY/Gallup Poll found 57% of adults say the stimulus package is having no impact on the economy or making it worse. Even more —60% — doubt that the stimulus plan will help the economy in the years ahead, and only 18% say it has done anything to help improve their personal situation.

That skepticism underscores the challenge Obama faces in trying to convince the public that the stimulus has helped turn the economy around. It also could complicate the administration’s plans to overhaul the nation’s health care system.

So much opportunity. Such a chance to act both decisively and responsibly to build a lasting block of support and improved fortunes. Squandered. You may think this is some sort of gloating, but it’s really not. There was potential and, yes… I’ll say it… hope. But it’s getting chewed up and spit out by overreach and failed, populist theories of economics.

44 Comments

  1. Republicans are like arsonists who set the house on fire and then stand around and complain about the work of the firemen.
    But I suppose they are experts on “failed theories of economics.”
    The word “disingenuous” is too mild for this post.

  2. The stimulus hasn't happened yet – a part of it has. Recognize that basic fact or employ some humility.

    Who am I kidding.

  3. Just because people believe something doesn't make it so. I wish people arguing that the stimulus did nothing by arguing that the economy is stabilizing and pointing to the GDP/jobs would you know, actually look at the breakdown in those statistics about how much is coming from the government. Jeez louise.

  4. Americans are sometimes laughable…

    I wonder if anyone polled actually understands how to properly judge whether or not the stimulus has had an impact on the economy.

  5. I don't understand your comments, mikkel, kastanj, dgfunk. Are you saying the stimulus is working or not?

  6. While it's true that most of the stimulus hasn't been spent on new projects yet, it has covered *enormous* gaps in state budgets, without which hundreds of thousands of people would have been laid off, millions would lose social services and we'd definitely have contracted at a 6-10% rate in Q2.

  7. Well jclmeme, you point out something that has long been a concern of mine, which is that budget shortfalls across the country (both operational and pensions) are so gigantic that they are basically impossible to cover. We are looking at hundreds of billions of dollars in deficits over the next two years on the state level even assuming optimistic economic growth…what I feel is a realistic growth scenario will lead to more like $400-$500 billion. On the state level! (Federal will stay around $2 trillion, or maybe go up to $3 trillion if it tries to cover the gap).

    During the stimulus talks I had many posts on why I disagreed with the final bill and that it wouldn't “work,” but the arguments had nothing to do with the meme being brought forth now which is that it wasn't necessary because we'd recover on our own. Indeed, I argued that the stimulus would halt the decline and that would create a false sense of optimism which would derail financial and economic reforms needed to get through the next couple of years…and that sometime this fall we'd start the drop again.

    It's possible we won't start the drop this fall, but the imbalances are back up to historic levels and the commentators that called the first drop are starting to say that if it doesn't collapse this year it will next year.

  8. I'm not of the opinion that the stimulus did nothing, but I do think it was poorly designed and way too costly. It's a matter of cost effectiveness, not a yes or no answer to 'Is it working?'

  9. Granted. The stimulus is not the only government program in play right now. The government has put trillions of dollars into the system: bailouts, tax cuts, stimulus, etc. Yes, you can slow a descent into depression with that kind of money being stuffed into the economy, but at what cost?? Deficit spending has never, I repeat never, helped any economy in the history of man, into a sustained recovery, i.e. the lost decade of Japan. We are looking at a shrinking GDP, unemployment in the 8-10% range, an imploding commercial real estate market, the stock market is being pumped up artificially, and the consumer (70% of the GDP) is in debt as far as the eye can see. It is what it is. Read these please and then re-evaluate:

    http://market-ticker.org/archives/P6.html

  10. Americans are sometimes laughable… – shannonlee

    Nailed it! Being clueless never stopped anyone from expressing an opinion, and I am convinced that we have in large part become a clueless (but noisy) nation.

  11. This despite all of the evidence that the stimulus did help the economy. Specifically by driving up state and federal spending which accounted for approximately 4 percentage points of the change from -6.4% GDP change to -1% GDP change.

  12. America now 57% less stupid than previously thought – Jazz Shaw

    Americans are sometimes laughable… – shannonlee

    To which I would only add that being clueless never stopped anyone from having an opinion… especially in the neo US of A.

  13. Well, the politicians touted as a cure-all for the economy and that if it wasn't passed, we would be facing a catastrophe of enormous proportions. In lieu of such statements, I think they were highly disingenuous, and played on the fears of the common man. But you are right, as far as it being poorly designed and costly.

  14. Come now Jazz, you enjoy the fact that police patrol the streets and there are dudes that come by and pick up your garbage. Right?

    As Mikkel notes, all of that would be in far greater jeopardy if not for the stimulus.

  15. ChrisWWW, there is no way to quantify, “what would have happened had I not done x.” You are bordering dangerously into the realm of hypothetical rhetoric.

  16. “the politicians touted as a cure-all for the economy”

    I'm calling bull on this. Were you just simply not paying any attention when the stimulus bills were going through? I'd love to see one instance of *anyone* touting the program who called it a “cure-all”. So go, find it. What they said was that “if it wasn't [sic] passed, we would be facing a catastrophe of enormous proportions.” I don't think there's any doubt that that is very much the case, at least none by those who have been, er, paying attention.

    I wasn't polled, but I'd like to put my vote on “The Stimulus has helped my personal financial situation”. It most certainly has.

  17. once again roro80, there is no way to quantify, what would have happened…”. Please excuse me if I misspoke about cure-all, that was my opinion, based on the Democrats, rallying around the “package” they were touting.

  18. jclmeme777,
    If states have no money, and refuse to raise taxes, what happens? Services get cut. The federal government through the stimulus package has stepped in and helped fill some of these state revenue shortfalls. There is nothing hypothetical about it.

  19. Thanks, ChrisWWW, that was one concrete example I was going to bring up. While it's difficult to measure the all-over effect of the stimulus, we can see what happened in Canada. They put more money in more quickly than the US, and did not throw billions at tax refunds, and their economy has recovered much more quickly; in fact, they think they'll be entirely out of the recession by the end of the year. I know making any statement about how Canada does things smartly and therefore has excellent results is tantamount to treason, but there it is.

    Now, I do think it was very stupid to pass the stimulus without tying to it the reforms needed to prevent a future disaster. I suppose that's slightly off topic.

  20. Well, Chris, yes and no. My state (GA) found ways to cut expenditures without cutting much in the way of needed services, and I'll bet a lot of states could make up at least part of their shortfall that way. That said though, some states have been operating so far in the red that they couldn't possibly cut spending without serious implications for the residents and huge layoffs of state employees. Of course, that just speaks to the breathtaking level of fiscal irresponsibility that preceded the crisis though.

  21. It's just a redistribution of money. It doesn't create a sustainable economy. In fact, the interest payments alone, will become a drag for years to come. Remember, the governments money is OUR money. And this deficit spending is unsustainable, it will become a game of hot potato. It's just a matter of time, before the ticking time bomb of this economy and its so called green shoots, implode.

  22. jclmeme777,
    Maybe, and that's why it's important in good economic times to run a neutral budget or a surplus. That way when the inevitable downturn happens, we can safely spend our way out of it. Thanks to 8 years of Dubya, we don't have that cushion. But we still can't let the government implode and accelerate the downward cycle of the economy, which is what we did during the Great Depression. Thank the gods we learned something from that crisis.

  23. What did Dubya have to do with the states that don't have balanced budgets or the fact that many of them had no rainy day surplus to handle the downturn in revenues now, Chris?

  24. I would just like to thank all who have commented on this thread, it was lively and well thought out. I'm at a dangerous point in my life. When I was younger I didn't vote. As I got older I became a Democrat, but when I attained a good standing in life, I turned Republican. As of this year, I'm an Independent, who doesn't trust 98% of our elected officials to “do the right thing.” It's all about special interest, fundraisers, and the “real” power to change this country. Quite frankly, I don't see much promise for quite some time for real and honest democracy in our country.

  25. CStanley,
    I'm sure you know the answer, but I'll humor you.

    Most states (except Vermont I think) have laws on the books that keep them from running budget deficits. So that means that rainy day borrowing can only come from the Federal government.

    Jclmeme is worried that the debt incurred stimulating the economy is unsustainable. I'm sure that's true, but that wouldn't be such a big problem if Bush hadn't already added somewhere between $5-7 trillion to our national debt. The $800 billion stimulus is a drop in the debt bucket compared to that.

  26. sadly, jclmeme, I agree. Special interests buy legislation, get appointed to supposed regulatory bodies and the rules all work to shovel money into their pockets. The entire debacle of deficit spending and massive national debt is a Republican creation. That's right, the borrow-and-spend GOP is responsible for almost 100% of the current national debt, except that part spent by Obama to continue the BUSH BAILOUT. Remember? Every bailout proposal was BUSH, not Obama. Both parties agreed that the hemorrhaging had to be stopped and that only government spending could stop it. My rage at the greedy pigs at Goldman, JP Morgan and the whole mob makes me wish we'd let them all fail. But that wasn't going to happen. Return to start–the wealthy elite OWN our government and it does their bidding, not ours. Oh yeah, proof about the GOP debt creation:
    http://zfacts.com/p/318.html
    Every president since WWII has paid down part of the WWII debt except three. Reagan, Bush and Bush. They burned budgets like arsonists, as dgfunk said in the first comment. Obama? Too early to tell.

  27. Chris- I'm actually unsure of how many states have balanced budget amendments- I'm pretty sure it's the majority of them but is it really nearly universal?

    At any rate though, that has no bearing on whether or not they should put aside surpluses- in fact the existence of a balanced budget amendment would argue FOR putting money away for leaner economic times, since they can't deal with shortfalls through deficit spending.

  28. Greendreams–

    Every president since WWII has paid down part of the WWII debt except three. Reagan, Bush and Bush.

    Thanks for the link to that chart. I bookmarked it.

  29. Well, I can also say that Obama riding to Memphis and back on the wings of a flying unicorn hasn't helped the economy either, and I'll be that I'll get even more people to agree with me than 57%.

    Because it's generally accepted that things that haven't happened yet won't affect an outcome. Speculation about it might, but the thing itself cannot affect an outcome until it has happened.

    Makes me wonder about the other 43%, though…

  30. It may be too early to tell if Obama will join the three GOP presidents who didn't reduce the debt, but he sure isn't off to a good start. Is there anyone who actually believes that he has a plan to curb spending after all of these early binges? Regardless of whether or not you think the spending till now has been necessary, or if you assign blame to previous administrations or to Congresses that kicked the can down the road, I can't imagine that anyone would be unconcerned with the unprecedented rate of increase of our spending (starting with Bush, but accelerating in these first few months of Obama's administration.)

  31. @jclmeme: “It's just a redistribution of money. It doesn't create a sustainable economy.”

    This is true, certainly, but it does do a bunch of things that prevent future drags on the economy. For example, without the stimulus money, many more people would have lost jobs, meaning fewer people being consumers, more people losing their homes, more going on unemployment. Without the stimulus money, most states would have had much more difficulty in paying unemployment, which, again, would mean more people losing their homes, going further into debt, many would have ended up on the street that have not ended up there. These are not things that are easy to reverse once they happen, and in fact perpetuate the downward spiral of the economy. Something like losing a home because you've missed payments because you've lost your job or can't get unemployment takes all the wealth a person has built up and basically flushes it and the person's credit score. Once the economy recovers and that person gets a job again, that wealth is still gone, along with their ability to be a consumer. And that only counts the effects on that one person — it also flushes any bank profit and depresses the housing market, which flushes some of the wealth built up by those who *could* make their payments; it depresses the consumer market which of course means more jobs lost. And the cycle goes on.

    So no, it doesn't create sustainable growth, and those parts of the stimulus weren't meant to– they were meant to keep the effects of the rapid disintegration of personal and corporate wealth from getting worse, to stop the free fall.

  32. CStanley,
    States certainly share some of the blame in terms of inflexibility, but I think both of us would be concerned about large state surpluses. We'd rightly demand tax decreases. I would demand the same thing of the Federal government once the national debt was paid off.

    In any case, in good times the goal should be near neutrality in terms of the budget. The states were holding up their end (despite unfunded mandates passed down from DC), and Bush was burning his.

  33. CS, no one could be off to a good start. What aggravates me is that Republicans were content to vote for and defend these policies for all the years it took to build this debt, as long as it was redistributing wealth into the hands of the already wealthy, plus tax incentives for sending dollars and jobs overseas and disastrous unjustified and illegal war, plus war on drugs and the ongoing cost of incarceration from the “tough on crime” BS that produced big mandatory sentences for victimless potheads.

    Carter and every president before him accumulated $1 trillion in debt. 10 trillion was added by Reagan, Bush and Bush, leaving us with interest on the debt as our 3rd biggest budget item. Every president from now on has to deal with that astronomical interest, so before even meeting any policy needs, we have to pay $245 EVERY MONTH for each taxpayer in interest. That doesn't leave much for meeting the needs of citizens, and that doesn't include ONE DIME for actually paying down the debt.

    The only solution, returning top tax to pre-Reagan levels, is demonized daily and the very thing we need to run this country, tax revenue, has become such a 4 letter word that no one dares propose it. Result? More debt, more interest, and the end of American prosperity. Don't worry, though. The billionaires will be just fine. They always are.

  34. Chris- I'm more than willing to concede that Republicans in particular tend to demand tax cuts too quickly in lieu of building surpluses, and yeah, sure, I don't think the surpluses should be huge. But having something for a rainy day fund- plus having a diverse tax base that isn't going to be hit as hard by economic cycles is important, particularly if you have to balance the budget each year. It's inconcievable that you won't hit years where the tax revenues go down during that part of the business cycle- so how can you expect to provide the same services with less money during those years? There ought to be some planning for dealing with that other than going to the federal govt with hat in hand.

  35. I've linked to your post with a quotation of the poll from Obamanomics

    It may be to late to convince Obama to take a course that will grow the private economy. Although one would hope that looking how Reagan was able to spend more money because of economic growth resulting from giving the free market a chance to function. Most of the lines of GM that produced a profit have either been stopped or sold – leaving them in the same state as a professor with a lobotomy; now to survive they need corporate welfare; to sell their product they need somebody to put money in who is willing to lose it – Uncle Obama.

  36. “Stupid,” Jazz?

  37. So no, it doesn't create sustainable growth, and those parts of the stimulus weren't meant to– they were meant to keep the effects of the rapid disintegration of personal and corporate wealth from getting worse, to stop the free fall.

    My problem isn't with those 'rescue' parts- it's the fact that the vast majority of the stimulus (much of what hasn't yet been spent) wasn't progrowth either- in fact the CBO predicts that the long term effect will be to crowd out the private sector growth.

  38. My state (GA) found ways to cut expenditures without cutting much in the way of needed services, and I'll bet a lot of states could make up at least part of their shortfall that way.

    How much is “without cutting much”? There's an argument to be made that if a service is needed, it shouldn't be cut at all.

  39. there is no way to quantify, “what would have happened had I not done x.”

    And yet, we do it all the time.

    What would have happened if we hadn't gone into Iraq? If we'd let Saddam stay? If we hadn't had the surge?

    What would have happened if we hadn't bombed Hiroshima or Nagaski?

    What would have happened if we hadn't tortured hundreds of human beings or detained them indefinitely with no legal rights? What would have happened if we hadn't spied on Americans without warrants?

  40. There ought to be some planning for dealing with that other than going to the federal govt with hat in hand.

    I agree. Do you have any ideas? The only two ways I know of for government to free up money is to raise taxes or cut spending. I know the conventional wisdom is that conservatives oppose raising taxes and liberals oppose spending cuts, but I actually am not totally opposed to spending cuts as long as the spending that's being cut is the spending that should be cut. Unfortunately, “cutting spending” always ends up being synonymous with cutting spending for services that help the middle class on down, and I don't support that.

  41. In Missouri the Republican majority refused absolutely to consider setting aside any money for a rainy day fund. In addition they cut Medicaid sharply when funds were low and when it turned out there was money to restore the cuts they refused to consider that, too.

  42. I agree. Do you have any ideas?

    They need to do it the same way every stable middle class family does- by including in the budget some money to put away for the rainy day fund. It's not about raising taxes to do this, it's about realistically figuring the budget so that you don't spend 100% of the revenue you take in.

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