Americans Turn Negative on Economy

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By Jim Perez,
DebtHelp, Inc. Staff Writer
Against the orchestra of fiddles being played by President George Bush and the rest of his administration, an overwhelming majority of average Americans believe that the backflash from the once sizzling U.S. economy is now torching their wallets.

A just-released Bloomberg/Los Angeles Times survey shows 65 percent Americans say they expect a recession, with only 29 percent saying they don’t.

And 51 percent of those polled say the economy is doing poorly, compared with 46 percent who say it is doing well. This is almost a 180-degree turn-around from June, when 57 percent of respondents said the economy was doing well. This is the gloomiest view from the homefront since February 2003.

The poll bolsters results from the Reuters/University of Michigan Surveys of Consumers. The late October figure on consumer sentiment was 80.9, down from September’s final reading of 83.4. The 80.9 October figure was the lowest reading since May 2006, when it hit 79.1.

This one-two punch of bad news sets the stage for the Federal Reserve next week when it meets to decide whether to cut rates to try and head off the recession people fear is on the horizon.

The poll also hammered another nail in the GOP coffin: By 44 percent to 33 percent, Americans say Democrats would be better than Republicans at jumpstarting the economy, if a recession does hit.

Even the wild card that the GOP plays so well against the Democrats during election seasons, the anti-tax card, appears to be trumped: Nearly 66 percent say they haven’t benefited from the tax cuts Dubya rammed through Congress during his first term.
A majority of respondents oppose the tax plans being pushed by the leading Republican presidential candidates. Those plans are to cut taxes on corporate profits and maintain lower rates on investment income.

Fewer than half polled said investment income should be taxed at the same rate as wages. The rate on capital gains and dividends is now 15 percent, less than half the 37.9 percent top rate on wages and salaries. About 16 percent said investment income tax rates should be raised, while slightly more favor keeping those rates lower than earned income.

All of the major Republican presidential hopefuls have committed to maintaining the lower rate on investment income. Former Massachusetts Gov. Mitt Romney has proposed eliminating the tax for middle-class Americans.

By a 52 percent to 36 percent margin, respondents favored health and education spending as a better economic stimulus than tax cuts.

And a majority of Americans say they would tolerate higher taxes to help pay for universal health care. And about 60 percent of respondents said they would be willing to repeal tax cuts to help pay for a health-care program that insures all Americans.

Democratic presidential candidates Hillary Clinton, a New York senator, Illinois Sen. Barack Obama and former North Carolina Sen. John Edwards back the idea.

Most of the highest income group polled, those in households earning more than $100,000, support the plan. About 80 percent of Democrats like the plan while most Republicans oppose it.

The Oct. 19-22 poll of 1,209 adults had an error margin of plus or minus 3 percentage points.

Post written by Economy & News

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