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Americans worried more about personal deficit

Christopher O'Neill is worried about the deficit. The deficit, that is, in his personal income.
/ Source: Reuters

Christopher O'Neill is worried about the deficit. The deficit, that is, in his personal income after the 26-year-old Miami finance analyst was forced to find a temporary job paying $20,000 a year less than he earned until January when he was laid off from his auditor's post in Miami.

From Miami to Milwaukee, ordinary Americans are counting the cost to their own lives of the recession, which has seen the U.S. budget deficit swell to a record $1.4 trillion in the 2009 fiscal year — the biggest shortfall since World War Two.

While President Barack Obama and his top advisers rack their brains over how to goad the sluggish U.S. economy back into robust growth that boosts jobs and exports and reduces debt, most citizens are still struggling to fill the gaps in their jobs, incomes and lives caused by the downturn.

"What budget? Which one of mine do you want to start with?" said Wilma Kemper, 59, a retired office worker in Nashville, Tennessee, when asked about the federal budget deficit.

"Do you think the politicians care what we little people think about the national budget when we don't have a single say-so about it?," she added bitterly.

A new Thomson Reuters/Ipsos poll confirms the impression that many Americans find it difficult to see beyond the recession-muddled fog of their daily lives to the more elevated zone of policy-making and the relevance of the budget deficit.

The poll shows that most Americans, when asked about the economic issue they're most concerned about, rate the federal budget deficit well below high unemployment.

"My biggest worry is having a job," said O'Neill in Miami, adding that he welcomed all immediate efforts by Obama's administration, including economic stimulus initiatives, to bring down the jobless rate and revive the economy.

A rebound in U.S. growth between July and September ended the worst economic slump in 70 years, but unemployment has jumped to 9.8 percent and is seen going higher.

In the poll, high unemployment was listed by 33 percent of those asked as their top concern, followed by higher taxes (22 percent) and the budget deficit, lagging third (16 percent).

The poll showed 68 percent ranking unemployment and jobs as the top priority issue for their leaders, followed by economic growth (53 percent) and terrorism/war (50 percent).

The federal budget deficit lagged as a perceived priority with 48 percent, behind healthcare (49 percent), but ahead of taxes (38 percent) and the weak dollar (37 percent).

While Americans were more immediately worried about keeping their jobs, homes and cars in the recession, many expressed an awareness that the huge looming bulk of the deficit, a direct effect of U.S. economic strategy in recent years, was somehow intrinsically linked to the country's problems and future.

"I know it's huge. ... The question is, how are we going to get rid of it?" said O'Neill.

Others saw it diminishing the United States' power in the global arena, ceding ground to fast-charging Asian economic giants India and China. "It's making us overall weaker in the world circle," said Penny Anstey, a self-employed laser imaging expert from Wisconsin who was in Los Angeles for a conference.

Jay Benkowski, 50, a homebuilder in South Milwaukee, shares the view of White House budget chief Peter Orszag, who said this week that running successive annual massive budget deficits was "ultimately unsustainable."

"It's just one big vicious dog-chasing-its-tail cycle that we are in. Where do you get the money, if there is no more coming in? ... I used to rent to people who were employed factory workers, and now those same people are on housing aid. We are going toward diminishing returns and, at some point, there is no return," Benkowski said.

With the United States running record deficits as it spends furiously to try to stimulate the economy, Obama has called for innovative ways to finance growth that would not be "debt-driven," but based on U.S. exports and manufacturing.

He has pledged not to raise taxes on American families who make less than $250,000, but some, like retired Milwaukee investigator Tom Hanratty, said they believed higher taxes might be needed to help pare back the budget deficit.

"I would support higher taxes if they go for helping enrich the needy — including providing health care and education," said Hanratty, who is 68.

The political debate over the deficit has become entwined with the fiercely partisan confrontation between Democrats and Republicans over Obama's healthcare reform plans.

White House advisers say reforming the health insurance market will significantly reduce the budget deficit, countering Republican critics' claims that health reform is too costly.

This conflicting, politicized emphasis was also reflected in the Thomson Reuters/Ipsos poll: while Republicans put the federal budget deficit second only to higher taxes in their top economic worries, Democrats relegated the budget deficit to the bottom of the list, after high unemployment, slow economic growth, higher taxes and a weak dollar.