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More than 60 percent of respondents to this week’s RBJ Daily Report Snap Poll say less fiscal stimulus is what’s called for now, while a third favors more stimulus. But when tabulated by political party affiliation, the numbers tell a very different story.
Seventy percent of Democrats call for more stimulus, compared with 62 percent of Republicans who want less stimulus.
In a National Association for Business Economics survey released this week, a plurality of economists (43 percent) said current fiscal policy is too restrictive and a slightly larger plurality (45 percent) favors more fiscal stimulus for 2013. One-third of respondents favored a more restrictive fiscal policy for next year.
Asked how Congress should tackle the longer-term problem of the federal budget deficit, 90 percent of the economists favored a mix of spending cuts and tax increases, with a plurality (45 percent) supporting equal amounts of reduced spending and higher taxes.
Among all RBJ Snap Poll respondents, more than a third favor equal spending cuts and tax increases, while 21 percent recommend only spending cuts and 37 percent say mostly spending cuts. The remaining 8 percent called for all or mostly tax increases.
To reduce the federal budget deficit, 25 percent of Democrats favor spending cuts, compared with nearly 75 percent of Republicans.
Roughly 590 readers participated in this week’s poll, which was conducted Sept. 24 and 25.
In your view, what is the best fiscal policy for now through 2013?
Less fiscal stimulus: 49%
More fiscal stimulus: 33%
No change: 18%
Less fiscal stimulus: 62%
More fiscal stimulus: 17%
No change: 21%
Less fiscal stimulus: 17%
More fiscal stimulus: 70%
No change: 14%
Among other or non-affiliated:
Less fiscal stimulus: 51%
More fiscal stimulus: 33%
No change: 16%
What approach to reducing the federal budget deficit do you favor?
Only spending cuts: 21%
Mostly spending cuts: 37%
Equally spending cuts and tax increases: 34%
Mostly tax increases: 7%
Only tax increases: 1%
Only spending cuts: 25%
Mostly spending cuts: 49%
Equally spending cuts and tax increases: 23%
Mostly tax increases: 2%
Only tax increases: 1%
Only spending cuts: 6%
Mostly spending cuts: 19%
Equally spending cuts and tax increases: 56%
Mostly tax increases: 17%
Only tax increases: 2%
Among “other” and non-affiliated:
Only spending cuts: 24%
Mostly spending cuts: 33%
Equally spending cuts and tax increases: 35%
Mostly tax increases: 7%
Only tax increases: 1%
What is your political affiliation?
We need less government involvement in the private sector.
—Ray Camp, RE/MAX Plus
All the data indicates that investment in the economy, rather than disinvestment, adds jobs. Building roads, investing in business pays off with jobs. That's what we should be doing now.
More fiscal stimulus—in other words more debt? You're kidding, right?
—Steve Wichtowski, Cook Iron Store Co. Inc.
To stimulate the U.S. economy, you must put money into the pockets of the working and middle classes. Our roads, bridges, passenger rail, air traffic control and port facilities are in poor condition and will get worse as each year passes. It will cost trillions, but putting people to work on rebuilding infrastructure will provide meaningful work for millions at all levels.
—Carlos Mercado, KCM Services
Reagan started this whole mess and everyone since has copied it. It’s always easier to spend than cut. The next president is going to have to do one or the other!
The long-term effects of the past six years of fiscal policy will haunt this country for generations. The smallest of increases in interest rates will cause an increase in debt payments this country cannot manage, yet our elected officials can't see this looming tsunami. Scary times are coming indeed.
—David Fiegel, Blackbird Asset Services LLC
My father had only a fifth-grade education and knew enough not to spend what he didn’t have or what belonged to someone else. When will this country understand this very simple adage?
The initial stimulus of 2009 has become the continuous stimulus for the past four years as federal spending has remained at an elevated level. Our excessive spending creates an excessive deficit and that deficit scares business from investing in the future. It is time to significantly cut back on federal spending.
It is time to stop spending money we don't have. Freeze federal employees’ salaries including politicians for two years. Cut all federal travel 50 percent. Put politicians under same health care and Social Security as taxpayers.
—Bob Rutt, Gates
No. Stop the insanity! If $16 trillion in debt and another $100 trillion to $200 trillion in unfunded mandates hasn’t created the Progressive Xanadu, more debt won’t. At some point the fecal matter will hit the fan from our fiat money policy, just as it did in the Weimar Republic, Zimbabwe and more recently Greece.
No more “stimulus.” We can’t borrow for any more useless projects.
—Frances Reese, Reese Environmental Consulting
There should be stimulus money used to overthrow all crooked politicians, tax cheats, etc. whatever their party. How much did we lose on cash for clunkers? What’s our ROI for “our” investment in failed solar companies? I’ve had it with 80 percent of government everywhere.
—Daniel Mossien, architect
The approach I would prefer is common sense.
—Jon Freitag, Rochester
I think it's too early to tell if another stimulus is needed. I'm hoping for an economic recovery continuation after the election, but I'm not sure what aide will provide it. While Romney favors big business, I'm sure the little guy is going to get it stuck to him. While Obama favors the middle class, I'm not sure that big business may still hold onto their dollars. Unemployment is still high, and we need to bring jobs back to the U.S., as well as support new business growth. There's a lot that has to be done in the next term so we might as well hold off on the stimulus until we see who wins. We could put out another massive stimulus plan like Bush did and then let the next president deal with it. Yes TARP started with Bush.
This question is equivalent to realizing you are heading in the wrong direction and ask if we should drive faster. The market will ultimately determine the effectiveness of the current policies. Although our current leaders cannot hear it, the market is shouting "no" to more stimuli and control. When we stop pushing the pain down the road and bite the bullet, we will build the confidence to start the economy up again.
Spending cuts and tax decreases are the only way to go. The Reagan and Bush tax cuts both created a tremendous increase in revenue to the Treasury. The problem for President Reagan was that Speaker of the House Tip O’Neill would not make cuts to the bloated federal government. In fact, President Reagan actually shut down the federal government at least three different times in a show of defiance to Tip O’Neill and his cronies in the House of Representatives. Unfortunately, President Reagan did not have enough clout to overcome the House of Representative's stubbornness. George W. Bush did not focus on reducing the spending of the bloated Federal government until after the Democrats took control of both the Senate and the House in January 2007. In summary, hopefully our next president, Mitt Romney, will have a Republican Congress, which will allow him to reduce taxes and decrease the size of the federal government beginning in January 2013.
—John Rynne, president, Rynne, Murphy & Associates Inc.
Federal reserve "stimulus" otherwise known as QE1, QE2 and now QE3 has primarily been used to prop up the federal government's insatiable spending habit by buying U.S. treasury bonds. If the Fed stops QE, who is going to buy the bonds to continue the uncontrolled deficit spending? The answer is nobody! There is not enough money in existence to do that, so they must keep printing more! And all that money seems to have gone down a black hole, with nothing of any value to show for it. The economy still stinks! Since Mr. Obama became president, and the Democrats took over both houses of Congress in 2008 we have not had a federal budget passed! How can you balance the budget when there is no budget? The unfortunate answer is that spending has to be brought down to the level of incoming tax revenue. Since social programs are the lion’s share of federal spending, we must start there. I have been told by people who know that fraud consumes as much as 30 percent of federal spending for Medicaid, HUD programs, food stamps, Social Security disability programs (not retirement) and bloated government bureaucracy. That is where the spending cuts must come from. If we could get rid of the fraudulent "freeloaders" and non-productive bureaucrats, we could probably start paying off the federal debt and eventually cut taxes too. But only if we have the guts to elect a cost cutter! Did someone say Mitt Romney?
—George Thomas, Ogden
There is plenty of capital available to spur the economy. The problem is that government at all levels—state and federal—is doing everything possible to stop it from being deployed. The single biggest potential job engine in New York State is drilling for natural gas, yet the governor and envirokooks have delayed it for years. The banks have money to lend, but Dodd-Frank and the FDIC have made it impossible for them to lend it. Entrepreneurs want to build their companies, yet regulation after regulation makes it impossible to create jobs and grow. We don't need another "stimulus," we need government to get out of the way.
Money to rebuild/build our infrastructure would be a sound stimulus. We need more "cuts" in spending to be phased in carefully, but we also need some revenue generation, also to be approached carefully to avoid another recessionary dip. Simpson-Bowles is a good place to start the discussion.
—Carolyn Phinney Rankin, president, Phinney Rankin Inc.
New stimulus? Have we not learned a thing? Are we better off than after the past stimulus? Let the water seek its own level, legitimately, not artificially.
—JA DePaolis, Penfield
The federal government should be held to the same budgetary constraints as the American public is currently experiencing. Money is tight and so is the credit market. Programs put in place to help Americans are not easily accessible or they are only accessible to the smallest portion of the population needing financial relief. Bring down interest rates on credit cards for everyone; not only those with scores 720 or higher. Lower interest rates on mortgages for everyone, not just for a select few in the marketplace. The American public is cutting back to survive, what is the government doing? There is a saying: "If I did anymore belt tightening there would be two of me"!
—L.S. Decker, MVP Health Care
We have already had two stimuli, which basically just added to the massive national debt. The best stimulus would be to downsize the federal government by 5 percent and in the process eliminate all of the over-regulation brought on by Obama's edicts against businesses he does not like.
—Bob Worden, Penn Yan
For answer 2, I favor a simplified tax system. Currently it is inherently unfair for most people.
Let’s call stimulus what it really is: crony capitalism and massive waste. Here are some examples of past projects: Solyndra got a $535 million loan guarantee in 2009, then filed for bankruptcy in 2011; Boeing got $16 million to help clean up an environmental mess Boeing created in 2007; TARP loaned billions to the same banks that helped cause the fiscal crisis while the mortgage default rates hit an all-time high of 13 percent; $62 million was spent on a tunnel to nowhere in Pittsburgh that even former Pennsylvania Gov. Rendell called “a tragic mistake”; the Forest Service got $554,763 to replace windows in a closed visitor center at Mount St. Helens; and $2 million was spent on road signs indicating that the projects were paid for by the stimulus bill.
—Karen Zilora, Creative Scanning Solutions Inc.
"Insanity is ..." The previous "stimulus" moves didn't stimulate anything. So they obviously are misnamed. A better name would be Kick-the-Can-Down-the-Road again. Theoretically this should work. Since historically it has never worked before, the theory has been discredited and should be thrown out. Keynes was wrong, but too many economists have tied their reputations (and paychecks) to Keynes. So they will continue to force the medicine that doesn't work down our throats. Look at Europe to see where we are headed. The countries that are fiscally sound (Canada is a good example) have cut government spending and all tax rates. The media hated George W. Bush. But in July of 2006 unemployment was 4.0 and we were told this was the worst economy in 50 years, based on "fairness." So in 2006 we voted in a Democrat Congress. In 2008 we voted in Obama. Welcome to the fairness economy. More Bernanke and stimulus and fairness will leave everyone equally broke and out of work.
—Dennis Ditch, Delta Square
We desperately need to overhaul the tax codes, providing our businesses a more level playing field compared to foreign corporations. This will bring jobs home and entice new business growth. The economy expands and special interests are eliminated from advantageous tax treatment—a level playing field at home, too.
We cannot conquer long-term deficits without addressing the role of tax cuts for the wealthy, tax loopholes for corporations and the financial sector, the failure of for profit health care at 17 percent of GDP, or tens of billions of dollars in trade deficits every year financed through treasury, mostly with China. In an economy 70 percent of which is based on consumer demand, we need short-term stimulus for infrastructure, states to maintain public services, and to put people back to work at decent wages. Then, instead of receiving benefits they will be paying into Social Security, Medicare, etc. while spending and creating demand.
—Jim Bertolone, AFL-CIO
We need to balance revenue and spending. Nowhere in that simple statement do the words “cut” or “increase” appear. The operative word is balance. I don't quite understand why federal, state and local leaders don't campaign on a platform of balance. I suppose that might require compromise; another word that has been largely forgotten in government.
—Wayne Donner, Rush
How about tax breaks for corporations who create new jobs? I realize that this will hurt the deficit temporarily, but track that that job will increase tax revenues, and promote spending to increase GDP.
—Hutch Hutchison, In T'Hutch Ltd.
9/21/12 (c) 2012 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email email@example.com.