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Subscribe to RSSAmericans are growing increasingly worried about federal debt and government dysfunction, which economists say could be a sign they are afraid that squabbles about the fiscal cliff and the debt ceiling could derail the nation’s fragile economic recovery.
"I would guess that the real concern is that if Congress screws things up with the fiscal cliff … and then coming up with the debt ceiling, that it will hurt the economy," said Justin Wolfers, a professor of economics and public policy at the University of Michigan.
The economy in general still tops the list of the biggest problems facing America today, with 21 percent listing it as the biggest issue, according to a Gallup poll released this week.
But the poll conducted in early January found that nearly as many people – 20 percent – listed the federal deficit as the top problem facing the country. The percentage of people listing the deficit as the biggest U.S. problem has grown sharply in recent months, while the percentage of people naming the economy in general has fallen.
Over that time, Americans also have grown much more dissatisfied with politicians and the government. About 18 percent listed politicians and the government as the top problem facing the U.S. in the January poll, up from 9 percent in October.
Meanwhile, 16 percent said unemployment was the top problem, down from 26 percent in October. That marks the first time since 2009 that unemployment has not been in the No. 1 or No. 2 spot.
Economists say they don’t necessarily think Americans are less concerned about the economy or the tight job market. Rather, they say, Americans may be growing more concerned that political infighting and the growing federal deficit could hurt the nation’s already fragile economic recovery.
“We’re maybe actually just as concerned about unemployment as we were six months ago, but we’re much more concerned about the deficit,” said Erik Snowberg, a political economist at the California Institute of Technology.
Snowberg and others say Americans likely want the government to fix the nation’s economic woes, or at least not exacerbate them.
“It’s one thing if (politicians) can solve the people’s problems. It’s another thing if they are doing the opposite – if they’re just arguing and not solving problems and making things worse,” said Chris Christopher, senior principal economist with IHS Global Insight.
Christopher noted that consumer confidence fell sharply in November and December, as the fight over the fiscal cliff started to heat up. Wolfers, at the University of Michigan, documented a similar effect when the debt ceiling fight came up for the first time in the summer of 2011.
Economists say it’s not clear how much of an effect consumer confidence has on things like spending and hiring. But it is clear that consumer confidence is impacted by political strife, and there’s been plenty of that in recent months.
"We're going from the fiscal cliff into higher (taxes) to this bickering over the federal debt ceiling,” Christopher said.
The political strife comes as the nation’s economy appears to be steadily, if slowly, improving. The job market is adding some new jobs each month, and the housing market appears to at least be stabilizing.
Still, economic growth is not yet strong enough that something couldn’t throw it off course, Snowberg and others say. President Barack Obama warned Monday that an extended fight over the debt ceiling could weaken the economy or even push the nation back into recession.
The United States is set to hit the limit on how much it can borrow some time in the next month or so, and Congress must approve an increase in that limit so the government can pay its bills. But Republicans would like to use the debt ceiling limit vote as an opportunity to push cuts in government spending, which they say are necessary for the nation’s long-term fiscal health.
Related story: Fitch warns US credit rating at risk over debt ceiling squabble
Democrats argue that it doesn’t make sense to use the debt limit as the basis for that discussion, since the limit itself does not authorize the government to spend more money.
Wolfers, who does work for Gallup but was not involved in this survey, said the idea that the U.S. could stop paying its bills because of political fighting is astounding to many people who are watching the situation unfold in other countries and in the financial sector.
“It’s a fragile recovery and we certainly don’t need politicians in Washington derailing it,” Wolfers said.
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When the economy crashed the corporations cut the fat out of their work forces and continued on. When everything was good all the complainers had jobs, houses they couldn't afford and toys they didn't need. The complainers were the fat and now they've been shed. It isn't any corporations responsibility to keep the fat in times of a down economy. Nobody owes you anything. Get over it and find a way to get hired or start a new business.
We've become a divided nation, and I honestly don't see it getting any better. The President has done more to pit us against one another than any President before him.
Of course we have. When government picks winners and losers, what else do you want?
The reason for dysfunctional government is the dysfunctional voters who elect their representatives that are half brain dead and mostly deaf to hear what is going on in the country. They can not see the good for the society in general because of their narrow minds and narrow thinking. You deserve what you elect your leaders for. Idiotic representatives will always bring idiotic results
The debt is 100% the responsibility of the Republicans. They have, for over three decades, intentionally run up the debt as part of their "starve the beast" philosophy. That tactic has completely failed in its objective to reduce the size of government (in fact GW Bush massively increased the size of the federal government, even creating a new cabinet level bureaucracy) however they have succeeded in running up a huge debt.
Below is a right winger ADMITTING that their strategy is to INTENTIONALLY increase the debt.
Peter17
The real winner with this legislation is the Tea Party and Grover Norquist. Their mission has NEVER been to protect the top 2% or anyone else. It is to force the end to "Big Government" in Washington DC.
The Tea Party was born because neither Democrats or Republicans were ever in the mood to cut spending and reduce the size of government. By handing out the pork to the folks back home, they kept on getting re-elected. That means the TP needed a different approach, and they found one - "Starve the Beast". If you cannot get Congress to pass legislation to lower spending, prevent them from raising the tax revenue needed to run "Big Government". Therefore they oppose tax increases of any kind on anyone. Less money will eventually mean smaller government.
So what does Obama do?? He makes almost all the Bush tax cuts permanent, cutting federal tax revenue over the next 10 years by $4 trillion. The TP probably cannot believe it because Obama has signed a "death warrant" on big government. Can you imagine anyone voting to raise taxes by trillions of dollars any time soon??? Not likely. The only way to get the country onto some kind of sustainable financial course now will be even more trillions of spending cuts than people were anticipating. Say goodbye to big government over the next 10-20 years. There now is no way to fund even a scaled back big government in Washington DC, thanks to Obama.
I really get a laugh out of our politians. Those that profess that the deficit is a big problem are the very ones who attach pork to every bill that comes along. Our politicians are addicted to pork barrel spending. Yes, even those who decry the deficit go right back to the pork capitol and it's busines as usual. What a joke these folks are. Liers everyone. There was over 6 billion $ of pork attached to the bill that kept us from going over the cliff. There is pork attached to the hurricain relief bill that has nothing to do with helping the hurricaine victims. Addiction to pork is our problem and I see no cure.
Why can't we get term limits on these idiots!!!!!!!!!!!
Because it would require amending the constitution and the first part of that process is for CONGRESS to approve it.
Guys I am appalled at some of the squabble here. The federal national debt has gotten so out of control in the past 4 years something must be done. So why is the White House so resistant to agreeing to discuss cuts, there is no other way. Mr. Obama has his political tax increase, so the revenue side is in place. The problem with Congress is that there is a fear he will continue to balk. Get with the program guys. The majority elected him and the buck stops with him. He is the leader of the Free World, so Mr. President lead! stop passing the buck!!!
What does it matter what the national debt is? Money is just a bunch of digits and pieces of paper with no true value behind it. Most of it is just made up funny money anyways.
The national debt has gotten so large the past four years because president Obama was forced to put the Iraq and Afghanistan wars on the books. The problem with congress is they won't take an axe to our bloated defense budget. It is time to tie military spending to no maore than 1% GNP.
If you can't bargain collectively you have no leverage to get more income. And in many state there are rules in place to impede that.-like right to work laws. So the American worker is continually screwed against getting ahead.
Many unions exist and have many members in right-to-work states. What you appear to not want is more balance in the equation.
The debt is 100% the responsibility of the Republicans. They have, for over three decades, intentionally run up the debt as part of their "starve the beast" philosophy. That tactic has completely failed in its objective to reduce the size of government (in fact GW Bush massively increased the size of the federal government, even creating a new cabinet level bureaucracy) however they have succeeded in their goal of running up a huge debt.
J. Willard Marriott
Below is a right winger ADMITTING that their strategy is to INTENTIONALLY increase the debt.
Peter17
"The real winner with this legislation is the Tea Party and Grover Norquist. Their mission has NEVER been to protect the top 2% or anyone else. It is to force the end to "Big Government" in Washington DC.
The Tea Party was born because neither Democrats or Republicans were ever in the mood to cut spending and reduce the size of government. By handing out the pork to the folks back home, they kept on getting re-elected. That means the TP needed a different approach, and they found one - "Starve the Beast". If you cannot get Congress to pass legislation to lower spending, prevent them from raising the tax revenue needed to run "Big Government". Therefore they oppose tax increases of any kind on anyone. Less money will eventually mean smaller government.
So what does Obama do?? He makes almost all the Bush tax cuts permanent, cutting federal tax revenue over the next 10 years by $4 trillion. The TP probably cannot believe it because Obama has signed a "death warrant" on big government. Can you imagine anyone voting to raise taxes by trillions of dollars any time soon??? Not likely. The only way to get the country onto some kind of sustainable financial course now will be even more trillions of spending cuts than people were anticipating. Say goodbye to big government over the next 10-20 years. There now is no way to fund even a scaled back big government in Washington DC, thanks to Obama."
What we need is a new government. One without political parties, career politicians, and lobbyists.
Both political parties will throw this country under the bus for their own political gain. It's about time people realized this.
We got the Obama tax hikes now its time to see the government spending cuts.
We should start with the massively bloated defense budget.
By any standard or measure the United States is bankrupt. We need to pay out about $5 trillion per year on maturing debt. The only way we can do that is to borrow it from new lenders. This type of operation is known as a Ponzi scheme. If for any reason those new lenders decide to stop lending, the whole thing implodes.
In addition we need to borrow another $1.3 trillion to cover the federal budget deficit.
There is no way that this can continue. We already consume by this borrowing about 8% of the World Domestic Product, and that number is going up all the time.
It's sad, it's infuriating, and it's not going to last much longer. The Fiscal Cliff and Debt Ceiling scares are just distractions from the real peril we're in. To turn and face this problem is political suicide. So we get the distractions instead, until the lenders finally decide to stop lending and our giant Ponzi scheme implodes into something that will almost certainly be greater than the Great Depression.
Very well said
I pride myself as a Moderate. So in response to the above, please wake up.
Yes you are correct the Congress is responsible for increasing the debt limit. However they (the Congress) are also correct in wanting to negotiate spending cuts to offset the increasing debt. We the people cannot afford year after year to allow this debt to increase eternally it makes no sense. Yes the National debt went to 5 Trillion dollars under the Bush Administration, but as you well know since 2001 we have been at war.
Now for todays debt heading to near 17 trillion dollars, I ask that the left please stop blaming previous administrations, Mr. Obama has been the President going on his 5th year the first 2 of which he was supported by a Liberal Congress. When he accepts responsibility for his position I believe that we will on the road to recovery. The spending as I can see it falls mostly to the White House, please look at the Cliff Bill recently passed and signed by the President. It contained more pork than revenue received from the increase tax. I am not blaming the Right or Left here but when is the Left going to assume their responsibility and both the Left and Right act for the people and not for political ends.
The debt is the most significant problem. The politicians of both parties are only interested in scoring points against the other side, and have no interest in dealing with real issues. That means the debt bomb will blow up on Americans before it is dealt with by our government.
right on
Actually I don't know how more deadbeat you can get by not controlling your spending and keep borrowing to pay off your debt. That's like paying off your credit card by taking out more credit cards eventually that ship is going to sail. As long as neither party is willing to address pork, fraud and corruption nothing will be solved, It all boils down to that we the people keep putting the same sellouts back in office so we the people are our own worst enemy. I believe in workfare over welfare but as long as the USA keeps rewarding people for going to foreign countries for slave labor and the freedom to pollute their heart out people will keep losing their jobs and then there will be no one left to buy the goods, services or pay taxes. Greed is like cancer eventually it kills the whole organism. That's why I voted for independents, Democrat and Republican two sides of the same hand sold out. People say I wasted my vote but at least I voted my heart and didn't put either sell out in office. Stocks will be a poor choice as long as CEO's are allowed to take massive stock options, salaries, bonuses and golden parachutes all while they run the company into the ground leaving the workers and stock holders holding the bag. As long as they refuse to address fraud and price gouging health care is doomed. Insurance has become a big Ponzi scheme, it allows an industry to charge more for services then the market would allow. It is based on people paying far more into the system then they will ever get out of it while others take sweet profits from that pay while cutting services to those who paid for them. America anymore is now controlled by industrialized elitist that only care about profit not who lives or dies. The public is just as greedy and corrupt as the companies, that's why it goes on and that's why we continue to elect the same sellouts back in office. The whole idea of the trickle down theory was give tax breaks to the rich so that they would create jobs in the US and those jobs would widen the tax base so everyone wins. The people of the US are being played, now graft and corruption is the rule instead of decency and fair play. I don't understand what is so hard about rewarding people for investing in the US and taxing the hell out of them for not.There was a reason we had tariffs, Ross Perot warned of the big sucking sound with free trade agreements while our so called leaders promised prosperity for all. If you invest in jobs in the US the government makes more money to give you tax breaks and if you invest outside the US but want the comforts and security of the US you should pay more. You can't compete with countries that allow slave labor and the freedom to cut costs by not having any regulations. Instead of moving forward our so called leaders are taking us backwards to the days of slave labor, child labor, unsafe working conditions, products and pollution so that a select few can make massive profits while the majority suffer.
Republicans are the biggest threat to the economy and to this nation.
Your comment makes no sense.
The biggest threat to the US economy is Republicans in the House of Reps in DC.
You had better look into the White House, there is more politicking coming from there right now than I can believe. It is a disgrace.