AP Poll Suggests American’s are “Stressed” over Economy – Credit Card Debt Featured – Cause and Effect Analysis

A poll released by the AP suggests that, for the most part, American’s are stressed over the economy. The focus of the poll is on credit card debt and management, while the article does take time to mention the continued high unemployment rate of 9.9% (averaged for the nation). What was missing is the summer’s annual hike in the price of fuel, with this year’s gulf oil spill insuring that prices at the pump may hurt a bit more than prior years, to top that off, NOAA (the official government weather agency) has suggested an unusually active hurricane season again this year. This information allows speculators to drive the price at the pump. One can add gas prices to the list of “stressors” that American’s face. As the average cost of a gallon of gas rises, so does the cost to commute to work, cuts must be made and those cuts, in the past, were for non-essentials. That said, as inflation has continued to chip away at food and fuel, , any additional rise in those rates should be seen in mid-July to August, as the price of fuel will drive up the price of groceries at the local store.

When one adds state and local (and possibly federal) taxes to the cost of living, the dip in one’s expenses makes meeting minimum credit card payments, and or mortgage payments difficult, especially for those who are on fixed incomes, say unemployment, where a bill presently before the Senate would buy additional time for those who have been receiving benefits for the maximum of two years.

When unemployment remains high, with unemployment benefits extended for lengthy periods of time, the most logical course taken by the current administration and certain states (New York, Massachusetts), would be to raise taxes on the wealthiest or the corporations that produce private sector jobs. In other words, exacerbating the problem – with an extension in place for benefits through November, that with a slow recovery, will have to be extended once again, especially in areas where fuel cost for heat will be heading toward peak months.

Are there jobs available? Yes, even in Massachusetts - that said those jobs may not pay as high as the ones current unemployment compensation – which would adversely affect home and property. Who foots the bill for unemployment benefits? Short answer: the taxpayer. An excellent treatment of the problem with the current system can be found hereat cascadepolicy.org. Although the individual states dole out the compensation (thus the archaic: “on the dole” when describing out of work compensation), it is normally covered by unemployment taxes paid by corporations, small businesses, and of course, when supplemented by the state and federal government, by the taxpayer.

This is, in the words of every letter ever received by the late Senator Edward Kennedy in response to any query about policy: “a complicated situation”. One would have to make it so attractive for employers to come back to the states, that tax cuts and other incentives might need to be in place in order to create jobs. Tax cuts to corporations (or anyone) will not happen under the present administration. With demanding more, while everyone is living with less and the strong influence of unions on the present administration, one can bet the house this situation will continue unabated, until such time as there is a) a change in administrations and eventually b) lawmakers with the guts to regulate unions to their basic function – watch dogs for those who have no voice and are working in dangerous occupations, ensuring those who fit the criteria make a living wage, and dues collected are put towards pensions. Wages for those union executives should be scrutinized as if they were Wall Street CFO’s.

With the union demands under control, cuts for corporations in order to stimulate job growth, (and tax cuts and incentives for those working and paying taxes (only 50% of the nation’s workforce), the economy will regain footing. Until then, printing money, and propping up failed systems, will be the key to continued stress amongst those who are footing the bill making do with less in order to keep the bill collectors and taxman at bay.