April 22, 2011

What's Causing Americans' Poor Mood?

Today’s NYT/CBS News poll showed American morale about the country’s economic outlook is the lowest it’s been since late 2008, when the country was still reeling from a deepening recession. So what's going on? Is the economy still improving or not?

"The low level of satisfaction expressed in the poll relates primarily to the behavior of our political leadership. The economy is improving, and unemployment rates across the 50 states have improved markedly,” said Yandle. “Best estimates indicate the current pace of 3.2 percent real GDP growth will be maintained through 2012 with some pick up later.”

Retail sales, a barometer of wellbeing, are now higher than before the start of the recession in 2008, and fear-induced levels of personal savings are down a bit, he said.

“While consumers have a lot to feel better about from the standpoint of economic wellbeing, they are in a dour mood when asked if the politicians are doing a good job,” said Yandle. “This seems to reflect the sorry state of the debate on taxes, deficits, and expanding government in the face of hard times.”

“What’s interesting is the share of those polled who favor cutting defense or something other than welfare benefits corresponds closely to the share of taxpayers who pay no income taxes but receive lots of welfare benefits,” he said.  “Also, the share of those polled who favor raising taxes on those with higher income while also keeping welfare benefits in places corresponds again with the share that pay no income taxes.”