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Economic Perceptions vs. Reality

Economic Perceptions vs. Reality

A new CBS News/YouGov national poll deals mostly with politics, but since most politics influences policy, especially the economy, the results are worth considering. 

In the survey, a significant majority of U.S. adults were reported to be dissatisfied with the state of the U.S. economy.  When asked to pick a word that best described the condition of the economy, 61 percent said the economy was best described as “struggling;” 56 percent said it was “uncertain;” 36 percent said it was “punishing.” 

Less than a quarter of respondents – 21 percent – believe the economy is getting better; 58 percent think it’s getting worse. A full 70 percent or respondents said their salaries are not keeping up with inflation.

In Washington, the divergent economic data and solid employment numbers indicate a healthier economic standing for the nation than its citizens perceive in their wallets and bank accounts. Perhaps this all reflects a “new normal” for the economy, and the public will adjust. But the public sentiment should still serve as a reminder to policymakers: when consumers must pay for food, gas, mortgages, rent and vehicles, travel, health care, a pizza or a trip to the ballpark, they have two options: cash or credit.  

Such efforts as imposing rate caps, attacking “junk fees” that aren’t junk at all, but are allowed by state law and clearly disclosed, or other proposals that limit access to credit, are unhelpful at any time for many consumers, but particularly in more challenging economic times and for consumers who already have limited access to many forms of credit other folks take for granted, like a credit card. The public sentiment remains decidedly downturned on the state of the economy, and as is often the case, perception is reality.  But the data on the harm limiting access to credit creates is real and growing. If, as Washington’s data indicates, the economy is increasingly healthy, then policymakers should take a page from healthcare professionals, and first, do no harm. 

August 1st, 2023

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