Pick almost any poll over the past decade and you’ll find that voters always cite the economy as their top issue. Depending on the survey, the economy issue is also often more broadly defined in surveys as “jobs,” and, in the past couple of years, as “inflation.” But, however you look at the issue of the economy, we’re seeing a subtle change in how people process the constant flow of economic data that bombards them every day.
They are becoming more educated and more sophisticated on federal fiscal issues and how they impact their own economic futures. More leery of politicians spouting data points that clash with the reality of their own personal “economies.” Less trusting of economic happy talk, when 60 percent of them are living paycheck to paycheck as inflation continues to outpace wages.
Until the past two years, for the millions of Americans under 50, inflation has been an abstraction, a topic in their econ class, not something that directly impacts their lives. Perhaps it’s understandable. America hasn’t had to deal with serious inflation in over 40 years, not since Jimmy Carter’s presidency.
Many people don’t remember 1979, when their parents or grandparents sat for hours in long gas lines just to fill up their tanks. Even now, looking back, it’s hard to grasp that in March 1980, inflation reached 14.8 percent, and the bank prime lending rate hit a staggering 21.5 percent a few months later. Within a year, the 30-year fixed rate mortgage average was 18.6 percent.
It was a terrible time for the country. A perfect economic storm of high unemployment and inflation (stagflation), slow economic growth, increased government spending and tax hikes. Add to that contractionary monetary policy from the Federal Reserve, a savings and loan crisis and bank failures, and it isn’t surprising that it took until the summer of 1983 to right the economic ship of state.
The country, for all its problems since, has successfully avoided, until now, the kind of devastating inflation and misguided spending and tax policies that wreaked havoc on families and businesses back in the day.
For many Americans, this has been a painful wake-up call to the reality that there is a price to be paid for reckless government spending, and we’re seeing the impact of this realization in how voters view the economy and the Biden administration’s economic policies. They understand that inflation impacts almost every aspect of what is a complicated and connected economy.
Today, people are assessing their personal economic situation through the lens of inflation, but they’re also making connections among rising costs, deficit spending and the skyrocketing federal debt. Like inflation, government spending and rising deficits have been abstract constructs unconnected to most people’s everyday lives.
‘Strong as hell’
For decades, people have focused on family economics, not the federal debt in 10 years. After all, who can really grasp the magnitude of a billion dollars — much less a trillion?
But data is showing that people are not buying the argument that the economy is “strong as hell,” as President Joe Biden is fond of saying, and his trillion-dollar domestic spending bills may be two of the reasons why.
People have seen the federal budget hit $6 trillion for three consecutive years. The first such over-$6 trillion budget year, under President Donald Trump, included a significant emergency response to the COVID-19 crisis. But Biden’s budgets can’t claim the same rationale.
It’s clear that people are becoming more sophisticated economic consumers when it comes to the dynamics of the economy, but this increased awareness and understanding extends to other issues as well.
For instance, how the public looks at wages is changing. It’s no longer a matter of whether or not you get a raise. The question today has become whether that raise gets you — and keeps you — above water.
Gas and energy prices are now seen through a different lens, as well. The country has faced significant increases in gas prices before, most recently in 2008. But inflation wasn’t a complicating factor in the recovery from the Great Recession.
This time around, with staggering inflation, people have a better understanding that high energy prices impact far more than the price at the pump. Energy prices are now seen as a driver behind the cost of everything, upsetting the supply chain, emptying store shelves and creating a challenging economic environment for businesses to create jobs.
Our latest “Winning the Issues” survey (conducted March 1-3) confirms an electorate that is simply not buying the president’s narrative that his policies are working to lower inflation and spur growth.
When it comes to the right track/wrong track question, Biden has actually lost ground over the past year. In our survey, only 28 percent of people said the country is on the right track; 60 percent said we’re on the wrong track. In April 2022, right track was at 33 percent, while wrong track was at 57 percent.
Voters were asked, “Do you think inflation is getting better, worse, not changing?” Twenty percent said better, while 57 percent replied worse and 20 percent said “not changing.” That’s over a 75 percent consensus that Biden’s inflation policies aren’t working.
Case closed
For months, Biden has tried to claim credit for “lowering” gas prices from their near-record highs after imposing anti-domestic production policies, but people apparently see through the numbers game he’s playing.
They believe, by a margin of 47 percent to 39 percent, that gas prices are down over $1.50 from their peak. But when asked if “gas prices are comparable to what they were when President Biden took office,” only 32 percent believe that claim, while 52 percent said they don’t believe it.
On the statement, “Annual inflation has been down for 6 months,” Biden has been able to convince only 22 percent of voters that he’s making progress, while 61 percent aren’t buying that inflation is on the way out.
We also tested one of Biden’s favorite claims, asking: “Under President Biden’s economic plan, the deficit has come down by a record $1.7 trillion.” Fifty-one percent of those surveyed didn’t believe the statement; only 25 percent did.
But this question ought to worry Biden and his Democratic colleagues on the Hill as they unveil a budget blueprint expected to be characterized by critics as built on more spending, more taxes and more debt.
Our survey asked: “Which is a bigger problem, government spending or not enough revenue coming in from taxes?” Government spending: 70 percent. Not enough revenue: 23 percent. Case closed.
As the budget battle begins, Biden should be straight with the American people, because they are smarter than he thinks.
David Winston is the president of The Winston Group and a longtime adviser to congressional Republicans. He previously served as the director of planning for Speaker Newt Gingrich. He advises Fortune 100 companies, foundations, and nonprofit organizations on strategic planning and public policy issues, as well as serving as an election analyst for CBS News.
