When it comes to framing economic policy, it looks increasingly as though Republicans are winning the debate. Not only have they made “stimulus” almost a dirty word but there seems to be a growing feeling that deficit-financed spending is not a great way to pull the economy out of a recession. Forget the conclusions of the bipartisan Congressional Budget Office about how the bailouts and stimulus of 2008 and 2009 saved millions of jobs. Forget the global consensus around the need for coordinated stimulus after the financial crisis. The American public is simply not convinced.
The Reuters/Ipsos poll released today found 57 percent of Americans believe that, when economic times are tough, cutting the deficit is a better way to create jobs than deficit-financed stimulus.
With the U.S. congressional elections just six weeks away, this finding is bad news for President Barack Obama as he struggles to convince people that Republicans drove the economy into a deep ditch and Democrats are hard at work pulling it out.
But there could be a silver lining, if broad public concern about the deficit forces Americans to confront some tough choices after the Nov. 2 election.
Right now, Democrats and Republicans seem to be miles apart on economic policy. But there is at least a chance they may find common ground in 2011 over the need to get government spending under control. Tough choices mean politicians are going to have to be honest about economic realities and about the need for shared sacrifices because, as Bruce Josten of the U.S. Chamber of Commerce told the Reuters Washington Summit, “it’s not going to be a pain-free exercise.”