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Americans: Angry and Very Confused


A new poll highlights the obstacles to economic solutions.

Up for a little schizophrenia with your recession blues?

People are hurting and angry, but some on Wall Street seem oblivious. Worse, citizens want contradictory things from the federal government: More spending, a lower deficit, and lower taxes. That suggests it will be difficult to gain political support for the policies needed to revive the economy.

A poll conducted by Selzer & Company for Bloomberg News found that Americans want the government to increase spending on infrastructure projects, alternative energy, and job training in an effort to reduce unemployment, now at 10%.

But 51% of respondents say they doubt the effectiveness of such government programs. Despite calls for increased spending, 61% say they're pessimistic that Congress will be able to reduce the budget shortfall -- and apparently miss the connection between increased government spending and higher deficits.

Richard Kellaway, 75, a Unitarian Universalist minister in Dorchester, Massachusetts, sums the attitude up perfectly:

"The best thing we could do is take some public money to rebuild our infrastructure and improve it," he told Bloomberg News. "[Unemployed people] could be put to work in a matter of days."

Oh sure, never mind project design, environmental impact studies, supply, logistics, or the skilled labor needed for major construction projects. How are your welding skills today?

Sixty-four percent of respondents say bailing out the banks was a bad idea, although it looks like the Troubled Asset Relief Program headed off Armageddon and stabilized the financial sector. If so, that will make a recovery possible and we won't be selling apples to each other. (See also TARP, Though Wasteful and Unhelpful, Lives On.)

Too big to fail? No problem! Only 10% of those polled believe that breaking up large banks is a solution to avoid further taxpayer bailouts. More than half call for greater regulation of them.

Sixty-six percent of respondents want higher taxes on the rich to reduce the deficit, but the definition of "rich" continues to lower the threshold for those subject to proposed new taxes. Sooner or later people in the middle will get hit with higher taxes, either directly through the income tax or indirectly through higher gasoline taxes and other fees. The poll results show that 90% of respondents believe the middle class will have to make financial sacrifices to reduce the deficit, but only 25% support higher taxes on the middle class. A 60% majority favor tax cuts. Anyone care to propose a policy to satisfy those views?

Analysts estimate that Goldman Sachs (GS), Morgan Stanley (MS) and JPMorgan Chase's (JPM) investment banking unit will award about $30 billion in bonuses to employees this year. Seventy-five percent of poll respondents said banks that received federal bailout money shouldn't pay bonuses to employees. But perhaps many respondents forget that Wall Street bonuses would be heavily taxed by the federal government as well as the city and state of New York. Government at all levels faces falling tax receipts and growing budget deficits. In short, fat bonus checks are red meat for the taxman.
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