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Trouble Ahead For ‘Recession-Proof’ Luxury Market?

Looks like the U.S. luxury market, which kept chugging along throughout 2008, may finally be derailed. From the Chicago Tribune’s Sandra Jones on June 21:

When do you know that the economy is on the mend?

When the wealthy start spending again. And the rich aren’t expected to start digging into their Birkin bags anytime soon.

The luxury market, historically resilient to economic downturns, is forecast to drop an unprecedented 10 percent this year, according to a June report from Bain & Co. The Boston-based firm predicts purveyors of luxury goods won’t experience a full recovery until 2012.

Keeping an eye on the spending of the rich is a favorite American pastime. But it is also key to the economic recovery, said Ron Kurtz, president of the American Affluence Research Center.

The richest 10 percent of U.S. households account for as much as 50 percent of consumer spending, according to the center’s calculations, based on Federal Reserve Board data. Consumer spending, in turn, accounts for about 70 percent of gross domestic product.

“The affluent market is a leading indicator of what’s to come,” said Kurtz. “Given their losses in the value of their homes, investment and savings that they have experienced over the past two years, the affluent are likely to be conservative spenders until these losses have been largely recovered.”

Some ask if there is something else causing rich Americans to pull back on spending. Jones wrote:

One school of thought is the notion that well-heeled shoppers are holding back because they are self-conscious about their wealth in the midst of a deep recession, a trend pundits label “luxury shame.”

The American Affluence Research Center found that 90 percent of the most affluent households have always avoided ostentatious consumption and are “careful spenders and aggressive savers.” Their spending habits aren’t expected to change anytime soon.

The center’s spring 2009 survey found that 68 percent of the respondents have no plans to make any of the following major expenditures in the next 12 months: a car, cruise, boat, new home, vacation home or a home remodel project. That is a record high, as well as a marked jump from 53 percent in spring 2008 and 36 percent in spring 2005.

While the recession was well under way in 2008, luxury spending held up until the financial markets collapsed last fall.

As a result, writes Jones:

Now, glitzy shopping streets from Madison Avenue to Rodeo Drive to Oak Street are dotted with empty storefronts and sale signs…

Source:

“Luxury spending likely to drop 10 percent for 2009”
Sandra M. Jones
Chicago Tribune, June 21, 2009

Survey Says…

From an ongoing poll of AT&T Yahoo! Internet users that first appeared Tuesday:

Q. The president’s progress with the battered economy has been both praised and criticized. How well are his efforts measuring up with you?

Extremely well. We are undoubtedly moving in the right direction= 19%.

Fairly well. There’s still a long way to go= 14%

Not well at all. His plans are hurting more than helping= 66%

Not sure/No opinion= 2%

Not exactly the most scientific of polls. However, it’s interesting to see the results of 83,771 responses that were submitted as of 2 PM Central Time today.

Consolation prize

Where Consumers Are Cutting Back

From an Ipsos/Reuters poll of 23,000 people in 23 countries from April 14 to May 7 (hat tip Financial Armageddon)…

Ipsos polled people in the United States, Canada, Brazil, Mexico, Argentina, South Korea, China, Japan, Australia, India, Russia, Czech Republic, Poland, Hungary, Turkey, Sweden, Italy, the Netherlands, Belgium, Germany, France, Spain, and Britain.

The 23 countries make up 75% of the world’s gross domestic product.

Source:

“Exclusive: Global consumer confidence stabilizing”
Michelle Nichols
Reuters, June 2, 2009

It’s A Mad World After All

On Monday, the Federal Bureau of Investigation released their crime statistics for all of 2008. And, I, for one, am surprised at what the data revealed. From the Associated Press:

Cities in the United States got safer in 2008, while small towns grew more dangerous, according to FBI data released Monday.

The FBI says violent crime nationwide dropped by 2.5% last year. Property crimes also fell by 1.6%, according to the preliminary data collected by the FBI.

Cities with more than 1 million people saw murders fall by 4.3%; cities with 500,000 to 1 million people saw murders fall by nearly 8%, according to the FBI.

Yet in towns with fewer than 10,000 residents, murders rose 5.5%, rape increased 1.4%, and robbery 3.9%, the agency reported.

The latest data show violent crime fell for a second straight year, after increases in 2006 and 2005…

Nationwide, murder and manslaughter dropped 4.4% in 2008.
Aggravated assault declined 3.2%, forcible rape decreased 2.2%, and robbery dropped 1.1%, according to the FBI. The country also saw a huge drop in car thefts — more than 13%.

The western region of the country saw the biggest declines, with a 4.2% drop in property crime and a 3.4% drop in violent crime. The Northeast saw a slight increase in property crime, which rose by 1.6%.

Also just released were the results from an annual study of global violence. In comparison to the U.S. crime numbers, there wasn’t much of a surprise here. From Reuters’ Peter Griffiths yesterday:

The economic downturn has made the world more violent and unstable in the last year, according to a study Tuesday that ranked New Zealand as the most peaceful country and Iraq the least.

The impact of high food and fuel prices in early 2008 and the deepening recession later in the year eroded peace, according to the Global Peace Index, compiled by a unit of The Economist magazine group.

Economic weakening has increased political instability, demonstrations and crime in some countries, according to the study, which is online at www.visionofhumanity.org/gpi/home.php.

“Rapidly rising unemployment, pay freezes and falls in the value of house prices, savings and pensions is causing popular resentment in many countries, with political repercussions,” the report says.

Iceland, the most peaceful nation last year, fell to fourth place after violent protests over its economic meltdown.

“There is a very, very strong correlation between peace and wealth,” Steve Killelea, founder of the Global Peace Index, told Reuters. “Peace is a leading indicator on economic prosperity.”

New Zealand replaced Iceland at the head of the table of 144 countries. The top 10 included all the main Scandinavian nations as well as Austria in fifth place, Japan seventh and Canada eighth…

The United States rose six places to 83rd, wedged between Ukraine and Kazakhstan.

Kazakhstan…

Sources:

“FBI: U.S. crime falls, but small town violence up”
Associated Press, June 1, 2009

“Global recession making world more violent: study”
Peter Griffiths
Reuters, June 2, 2009

Majority Of Americans Play Down Swine Flu Threat, Part 1

I’ve been following the swine flu story since it first broke in the mainstream media, and have a few observations concerning the American public’s response to the virus. The most disturbing, while not totally unexpected, observation is that the majority of Americans, to date, do not appear to be too alarmed over the spread of H1N1 influenza. The available data seems to support this as well. From the LiveScience.com website today:

A survey by the Harvard Opinion Research Program at the Harvard School of Public Health found that 46 percent of 1,067 Americans polled on Wednesday, April 29, are worried that they or someone in their immediate family might get sick from the new flu virus in the next 12 months…

Here are some ways Americans are responding to the outbreak, the survey found:
• 59 percent are washing their hands or using hand sanitizer more frequently.
• 25 percent are avoiding places where many people are gathered, such as sporting events, malls or public transportation.
• 20 percent are avoiding people thought to have recently traveled to Mexico.
• 17 percent are avoiding Mexican restaurants or stores.
• 8 percent are wearing a face mask.
• 5 percent have bought a face mask.
• 5 percent are talking with their doctor about health issues related to swine flu.
• 4 percent of parents have kept their children home from school or daycare.
• 1 percent of people are getting a prescription for antiviral medications.

The latest numbers from an ongoing Chicago Tribune poll also seem to back up this observation. From the survey:

Are you worried about catching swine flu?

Yes (5,462 responses) 41.9%
No (7,579 responses) 58.1%

Is swine flu changing your use of public transportation?

Yes (1,122 responses) 18.6%
No (4,900 responses) 81.4%

Have you cancelled any airline flights because of swine flu?

Yes (437 responses) 7.3%
No (5,562 responses) 92.7%

Have you altered your kids’ schooling or activities because of swine flu?

Yes (912 responses) 15.6%
No (4,939 responses) 84.4%

Perhaps Americans are responding to recent headlines in the print and electronic media. Like the following, for example:

“Obama Seeks to Ease Fears on Swine Flu”
-New York Times, April 28

“Obama: Swine flu may be like ordinary flus”
-MSNBC, May 1

“Swine flu may be less potent than first feared”
-Associated Press, May 2

“US sees ‘encouraging signs’ in swine flu outbreak”
-Agence France-Press, May 3, 2009

“Outbreak of flu is less severe than feared”
-Baltimore Sun, May 4

“CDC: Swine Flu Outbreak Signs ‘Encouraging’”
-Washington Post, May 4

“CDC chief urging continued vigilance on swine flu, says strain may be more like ‘seasonal flu’”
-Associated Press, May 4, 2009

Such views regarding H1N1 could also be the result of optimistic conclusions reached by some in the academic community. Robert Mitchum wrote on Chicago’s WGN TV website on April 29:

As people around the world anxiously refresh Internet maps showing new locations of suspected swine flu infections, a Northwestern University professor has already mapped out the worst case scenario for the outbreak.

In four weeks, around 1,700 Americans could be infected with the disease, according to a model programmed by Dirk Brockmann, associate professor of engineering sciences and applied mathematics at Northwestern. About 100 of those cases would be in Chicago, Brockmann said.

But Brockmann said his model, based on direct and indirect measures of human mobility, predicts the spread of the disease as if no interventions are put in place to slow its spread.

Given the worldwide attention on the disease by public health organizations such as the Centers for Disease Control and Prevention and the World Health Organization, he would expect actual numbers to be much lower.

And for some the whole swine flu thing is nothing more than one big joke. Here are some comments I came across on a Chicago news site last week:

“I have a small cold do you think that should be a cover story?”

“I have a really bad case of wine flu. I drank two bottles of Strawberry Hill Boone’s Farm and 1 grape Mad Dog 20/20 last night. Probably gonna be sick all day ”

“So they close places down when a case is reported? God I hope someone in my office gets it this afternoon so I can have a long weekend.”

As we’ll see in Part 2 of this two-part series tomorrow, some might want to be careful what they wish for…

Part 2 can be found here.

Sources:

“Survey Documents Flu Fears”
LiveScience Staff
LiveScience.com, May 4, 2009

“Are You Worried?”
ChicagoTribune.com, May 4, 2009

“Study: 1,700 Americans could catch swine flu”
Robert Mitchum
WGNtv.com, April 29, 2009

Weekend Video

“Celebrate”

This headline, found on the cover of the Chicago Tribune’s Sunday magazine a few weeks ago, was the first time I detected a growing thaw when it comes to America’s mood and the economy.

Recent polls seem to confirm such optimism.

And since that one-word headline in the paper, the financial markets have rallied, and the powers-that-be in Washington and on Wall Street have been busy trying to shore-up confidence in the fight against the recession and larger financial system through increased rhetoric… and more taxpayer funds, of course.

So much so, with the kitchen sink and everything else being thrown at the financial crisis, I’d actually be surprised not to see an upswing in our country’s economic fortunes…

For a short-time, at least.

In the meantime, I’ll keep plugging away at this keyboard, convinced that we’re still in the early innings of a nasty contest that might even go extra innings if current form doesn’t change.

But, by all means, feel free to celebrate, if you’d like…

Japanese Motors, “Single Fins & Safety Pins” (2008)
YouTube Video Link

Do Rich Americans Pay Enough Income Tax?

Who remembers what the 2nd richest man in the world said about wealthy Americans and their income tax almost two years ago? From Tom Bawden of
The Times (UK) back on June 28, 2007:

Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

According to the staff at Gallup, Americans have routinely claimed high-income earners don’t pay enough income tax. From Gallup’s Jeffrey M. Jones yesterday:

Americans have consistently said that upper-income people pay too little in taxes. But with Obama promising to increase taxes on those earning $250,000 or more per year to help pay for his domestic policy agenda, the percentage of Americans who hold this view has dipped slightly to 60%, the lowest percentage Gallup has found to date. There has been a slight bump up in the percentage who now say upper-income people pay too much, to a new high of 13%.

Source: Gallup.com

There are plenty of opinions around on whether or not rich Americans pay too much, or too little, income tax. But CNN Money’s Jeanne Sahadi talked about the hard numbers yesterday, and wrote:

The U.S. tax code is progressive, meaning that higher-income tax filers pay more in taxes than those lower down the income scale.

But just how much more?

The highest earners pay the lion’s share of the dollars Uncle Sam collects.

The top fifth of households made 56% of pre-tax income in 2006 but paid 86% of all individual income tax revenue collected, according to the most recent data available from the Congressional Budget Office.

Narrowing in further: The top 1% of households, which made 19% of pre-tax income, paid 39% of all individual income taxes.

The trend is similar if you count income taxes, social insurance taxes, excise taxes and corporate income taxes (such as capital gains) combined. The top fifth of households paid 69% of all federal taxes. The top 1% paid 28%.

FREE FINANCE/INVESTING PUBLICATIONS for qualified readers

Still think the rich should be paying more income tax? What if someone were to argue that low- and middle-income tax filers aren’t paying enough taxes? From the CNN senior writer:

A Tax Foundation survey found 56% of Americans think the amount of federal income tax they pay is too high.

Those most likely to feel that way, according to the survey, include those making between $35,000 and $50,000.

But once the various tax breaks to which they’re entitled are counted, the burdens of low- and middle-income tax filers as a group has been fairly low.

The Tax Policy Center estimates that for 2009, 43% of tax units (most of which are lower income households that may or may not file a return) will have no income tax liability or will have a negative income tax liability, meaning the government will actually pay them.

Very interesting…

Sources:

“Buffett blasts system that lets him pay less tax than secretary”
Tom Bawden
The Times (UK), June 28, 2007

“More Say Low-Income Americans Paying Fair Share of Taxes”
Jeffrey M. Jones
Gallup.com, April 15, 2009

“Who pays taxes – and how much?”
Jeanne Sahadi
CNN Money, April 15, 2009

Survey: Bill Gates More Credible On Economy Than Obama

This morning I caught the results of a new Public Strategies Inc./POLITICO national survey of 1,000 registered voters that were posted on the political news website POLITICO.com— and had to chuckle. From POLITICO’s Andy Barr this morning:

Obama also ranked as one of the most credible voices on the economy, outdistanced only by Microsoft Chairman Bill Gates. Four in five voters find Gates credible “as a source of information on the U.S. economy,” topping the 71 percent who said the same of the president. Investor Warren Buffett ranked third, and Federal Reserve Chairman Ben Bernanke finished fourth.

Treasury Secretary Timothy Geithner, Obama’s point man on the economy, is found credible by 56 percent of the public, trailing Buffett, Bernanke, former President Bill Clinton and New York Mayor Michael Bloomberg. Romney, the Republicans’ top performer in the category, tied with Geithner.

Helicopter Ben fourth? Turbo Tax Timmy seventh? Now I’m starting to cry.

“Who da man?”

Source:

“Poll: Obama earns nation’s trust”
Andy Barr
POLITICO.com, April 14, 2009

Net Worth? Try Net Loss

Net worth. Now there’s a controversial subject. Most treat net worth as being synonymous with wealth. I have to disagree. As well-known investor and financial author Robert “Rich Dad” Kiyosaki pointed out in his book Rich Dad, Poor Dad:

I cringe every time I hear someone say to me that their net worth is a million dollars or $100,000 or whatever. One of the main reasons net worth is not accurate is simply because the moment you begin selling your assets, you are taxed for any gains.

Despite this and other drawbacks, many are obsessed with the topic of net worth and equating it to wealth. So, today I decided I’d take a look at how Americans’ net worth is holding up during the financial crisis. The Associated Press’ Martin Crutsinger wrote on March 12:

The net worth of American households fell by the largest amount in more than a half-century of record keeping during the fourth quarter of last year.

The Federal Reserve said Thursday that household net worth dropped by a record 9 percent from the level in the third quarter.

The decline was the sixth straight quarterly drop in net worth and underscored the battering that U.S. families are undergoing in the midst of a steep recession with unemployment surging and the value of their homes and investments plunging.

Net worth represents total assets such as homes and checking accounts minus liabilities like mortgages and credit card debt.

Family net worth had hit an all-time high of $64.36 trillion in the April-June quarter of 2007 but has fallen in every quarter since that time.

The record 9 percent drop in the fourth quarter pushed total net worth down to $51.48 trillion, a level that is 20 percent below the third quarter 2007 peak.

Perhaps Main Street would be happier knowing that plenty of millionaires didn’t escape the carnage. CNN Money’s Ben Rooney wrote on March 11:

The financial crisis has weighed heavily on American households, and millionaires are no exception, according to a report released Wednesday.

The number of American households with a net worth of $1 million or more, excluding the value of their primary residence, fell 27% to 6.7 million in 2008 from an all-time high of 9.2 million the year before, according to a report from market research firm Spectrem Group.

“America has a lot fewer millionaires than when this economic crisis began,” said George Walper, president of Spectrem Group, in a written statement.

But don’t weep only for the 2.5 million fewer millionaires. The report, which is based on surveys of 3,000 affluent households, also showed the number of both multi-millionaires and aspiring millionaires plummeted last year.

Affluent households, defined as those with a net worth of $500,000 or more, declined 28% to 11.3 million from 15.7 million.

Even the very rich have not been immune. Households worth $5 million or more, excluding primary residence, fell 28% to 840,000 last year from 1.16 million households in 2007.

The CNN Money staff writer also noted:

The report did not bode well for financial advisers. Only 36% of those surveyed said they have a satisfactory relationship with their primary financial adviser. That’s down from 85% last year.

Okay, so Main Street and Park Avenue both took a huge hit. Surely some group, like the billionaires, must have come out ahead, right? Wrong. Forbes’ Luisa Kroll, Matthew Miller, and Tatiana Serafin wrote on March 11:

The world has become a wealth wasteland. Like the rest of us, the richest people in the world have endured a financial disaster over the past year. Today there are 793 people on our list of the World’s Billionaires, a 30% decline from a year ago.

Of the 1,125 billionaires who made last year’s ranking, 373 fell off the list–355 from declining fortunes and 18 who died.

There are 38 newcomers, plus three moguls who returned to the list after regaining their 10-figure fortunes. It is the first time since 2003 that the world has had a net loss in the number of billionaires.

Sources:

“Fed reports record fall in household net worth”
Martin Crutsinger
Associated Press, March 12, 2009

“America lost 2.5 million millionaires in 2008 – survey”
Ben Rooney
CNN Money, March 11, 2009

“The World’s Billionaires”
Luisa Kroll, Matthew Miller, and Tatiana Serafin
Forbes, March 11, 2009

Study: Almost 80% Of Wall Street Employees Get Bonuses

And there was dancing on The Street. From Forbes’ Maurna Desmond this evening:

While 2008 was a devastating time for investors, 79% of Wall Street workers received bonuses, according to a study by employment Web site efinancialscareer.com…

Of the talented masters of the universe surveyed, a little less than half, or 46%, took home the same or more than the previous year. The jump in compensation most frequently rose less than 10% year-over-year, while those who made less than they did in 2007 usually took a hit between 31% and 50%. Keep in mind, the S&P index fell 38.5% under their watchful eye last year.

Now this is the part of Desmond’s piece I really found interesting:

Last year’s bonuses only satisfied 26% of respondents, and 46% were “at a minimum dissatisfied with their bonus.” On those expressing their great displeasure, nearly nine in 10 had been on Wall Street for five years or less.

It gets worse. More than half of respondents said they’d be job hunting this year; 20% said they are unhappy in their role and 10% say their jobs are likely to be eliminated altogether. Not surprisingly, 39% said they’d be “open to a better opportunity.”

Stand out from the crowd with a professionally written resume from Monster

I seem to recall something that Wall Street legend Jim Rogers said back in October 2007:

You see 29-year-olds on Wall Street making $10 million to $20 million a year, and they think it’s normal… There have been a lot of excesses.

Source:

“Study Says 80% Of Wall Street Got 2008 Bonus”
Maurna Desmond
Forbes, January 28, 2009

The Word From Davos? Gloom

Not much optimism can be found among the political and business leaders attending the World Economic Forum this year. Bloomberg’s Matthew Benjamin and Simon Kennedy wrote earlier today:

Gloom is deepening among business leaders and economists, casting a pall over this year’s World Economic Forum in Davos, Switzerland…

Concerns over the economic outlook are virulent as executives from JPMorgan Chase & Co.’s Jamie Dimon to Stephen Green of HSBC Holdings Plc join more than 2,500 counterparts, academics and policy makers in the ski resort for five days of soul-searching and deal-making.

“You have to realize the size of the problem confronting us today is significantly larger than in the ‘30s,” George Soros, the billionaire hedge-fund owner and philanthropist, said today. “The situation will continue to deteriorate.”

Just one in five of 1,124 chief executives in 50 nations said they were very confident about prospects for revenue growth in 2009, down from half last year, and more than a quarter said they were pessimistic, a survey by PricewaterhouseCoopers LLP showed. The sentiment was the worst since the accounting and consulting firm began tracking the CEO outlook in 2003…

The executives polled by PricewaterhouseCoopers survey don’t see a turnaround soon.

Only about a third were very confident about growth in the next three years, down from 42 percent last year. Almost seven in 10 said their companies will be affected by the credit crisis, and 70 percent of those said they will delay planned investments as a result.

Just 13 percent of U.S. executives said they were “very confident” about revenue growth in the next 12 months, compared with 36 percent last year…

Source:

“Gloom Deepens Among Executives, Economists at Davos (Update2)”
Matthew Benjamin, Simon Kennedy
Bloomberg, January 28, 2009

America The Unpopular

In a scene from the 1994 Roger Avary/Quentin Tarantino film “Killing Zoe,” an American tourist accidentally finds himself in the middle of a Paris bank heist:

Tourist (to robbers): Hey! This is insane! I mean, I’m a U.S. citizen. Come on, I’m just here exchanging some dollars. You must let me go— I’m an American. You know, from America. US of A. Come on, don’t you understand English? If it wasn’t for my country you’d all be speaking German!
Robbers (to tourist): (Machine gun fire)

On Monday, Reuters’ Ellen Wulfhorst reported on America’s unpopularity around the globe. She wrote:

The United States is viewed favorably by the majority in only two of 21 other countries with large economies, according to a survey released on Sunday, and it draws the harshest criticism for its foreign policy.

In research designed to measure global opinion and released days before Barack Obama takes office as U.S. president on Tuesday, India and Poland, along with the United States itself, were the only countries with majorities giving America a favorable rating.

The online poll of 22,000 people was conducted for Reuters by Ipsos Global Public Affairs, an international market research and polling company, in late November, weeks after Obama was elected to succeed President George W. Bush.

According to the piece, Ipsos polled people residing in the 22 countries that make up 75 percent of the world’s gross domestic product. Wulfhorst added:

The nations with the strongest unfavorable views overall of the United States were Russia and Turkey, followed by Argentina, Belgium, Germany and the Netherlands…

Overall, the United States was viewed favorably by 72 percent of Indians, 53 percent of Poles and 74 percent of Americans. Sixty percent of Russians and 55 percent of Turks gave the United States unfavorable ratings.

Hey, at least we know who our friends are, right?

Source:

“U.S. gets weak marks on global relations: poll”
Ellen Wulfhorst
Reuters, January 19, 2009

Poll: 6 In 10 Americans Say No More Funds For Bailout

According to a new survey, a majority of Americans polled want the federal government to stop funding the financial sector bailout. From CNN Money’s Paul Steinhauser today:

The government’s financial bailout for troubled banks has not worked so far, a majority of respondents to a national poll say, and six in 10 don’t want Washington to spend more money on the rescue.

Sixty-one percent of those questioned in a CNN/Opinion Research Corporation survey released Friday oppose providing more government money in the financial bailout. There are some supporters, however — 38% said the government should provide more assistance to ailing banks and other financial institutions.

Most of the 1,245 adult Americans who were questioned for the poll were surveyed before Thursday’s Senate vote to release the remaining $350 billion in the financial bailout program.

“One reason for the opposition to more money being spent may be that more than eight in 10 said that the first $350 billion of taxpayer money for the bailout didn’t work,” said CNN Polling Director Keating Holland. “Only 14% say that the money accomplished what it was supposed to do.”

Regardless of the apparent public opposition to the bailout, the Senate voted 52 to 42 to release the remaining funds.

“Talk to the hand”

Steinhauser, the CNN Deputy Political Director, added:

“Barack Obama may have something to do with the vote,” said Holland.

“Democratic leaders in the Senate may not have been eager for a showdown with the president-elect. The public would have been squarely on Obama’s side. Sixty-two percent in the poll say they trust Obama more than Democratic Congressional leaders.”

Funny. I was under the impression that trust had to be earned.

Source:

“Americans on bailout: Stop spending”
Paul Steinhauser
CNN Money, January 16, 2009

Poll: Americans Support Stimulus Plan

According to a new poll, Americans back a new economic stimulus plan being put together by the incoming Obama Administration. From the Wall Street Journal’s Laura Meckler today:

Americans support the economic-stimulus plan being pushed by President-elect Barack Obama but worry the government will spend too much money and widen the budget deficit, a new Wall Street Journal/NBC News poll found.

Overall, the poll found strong public backing for the stimulus plan and its major planks, particularly proposals to spend more federal money to create jobs…

Asked about the economic-stimulus package, now estimated to cost $850 billion over two years, 43% of people surveyed called it a “good idea,” while 27% said it is a “bad idea.” The rest didn’t have an opinion.

In a country where financial literacy might very well be a distant second compared to the knowledge of “reality” TV programming, I wonder how many Americans understand the potential ramifications of this “stimulus” plan, or even how it will be paid for?

Ron Paul, Dick Armey Discuss Obama Stimulus, 1/8/09
YouTube Video Link

Source:

“Obama, Stimulus Proposals Enjoy Broad Backing in Poll“
Laura Meckler
Wall Street Journal, January 14, 2009