Americans losing confidence as debt relief seems a long way off
A new study is showing that Americans are losing confidence because they see debt relief as a far off dream. According to a Washington Post/ABC News poll of 1,000 people, “Overall, 52 percent now say the stimulus package has or will succeed in restoring the economy, down from 59 percent two months ago.” Experts are saying that consumers are watching the economy and their personal finances closely to see signs of resilience. Logically, it’s the states that were hit hardest by the economy whose residents are the most pessimistic about the stimulus.
The effect of the stimulus
Part of the problem with the stimulus is its seeming lack of saturation to the personal level. Although the stimulus was $787 billion, the majority of the money is still working its way through large industry giants and corporations. It hasn’t yet reached the hiring level, where people would see the biggest advantage. Vice President Joe Biden said, “150,000 of the 3.5 million jobs that are supposed to be saved or created under the program are in place.” Most Americans, hearing these numbers, are despondent, rather than satisfied. Claire Montage of Hollywood, Calif., stated, “One hundred fifty thousand jobs is nothing compared to the millions of jobs needed. … I’m not going to get excited about less than a 10th!”
Montage’s sentiments are shared by the population. With a recent projection of the unemployment rate estimating to be well over 10 percent in upcoming months, many people are unimpressed with the work the stimulus has created thus far. People are reading signs and not seeing the huge changes the stimulus promised.
People want everyday changes to become apparent
Dr. John Fieldling, psychologist for Moser College, stated, “People do not believe what they can’t see. And, they can’t see many signs of a recovery, no matter how the media writes about it.” Mentality is everything with the public, and it would be difficult for them to believe that things are getting better when they are still struggling with unemployment, debt relief, making payments and finding extra cash. The lists of things that people are mentally focusing on are largely untouched by the stimulus. Stimulus money may be helping large corporations restructure, but homeowners aren’t seeing the immediate benefits.
The Obama administration wants to find some consumer support and confidence. However, that’s a difficult task. Economist Larry Rudd stated, “People are not going to take well to hearing about large corporations recovering…they want to be able to pay bills and see prices come down in the supermarkets. They want everyday changes to become apparent.” This is the key to gaining support. If the Obama administration is to gain consumer support, it will take time. There has to be enough time for the stimulus to work its way through the layers of the market and reach the consumer level. Rudd added, “It will take time for visible signs of recovery.”
Consumers are losing their confidence because of the growing unemployment rate, prices of goods and consistent problems with debt relief. Their everyday struggles are compatible with a negative assessment of the economy and its lack of growth. In turn, that contributes to a negative assessment of the stimulus. Only time will tell whether or not consumers will change their views of the stimulus, but one thing is for certain — until they see the actual changes, people won’t be satisfied.