By Peter Roff, Thomas Jefferson Street blog
On Monday the White House revised the upcoming year's deficit projections upward to nearly $2 trillion, a single year record. Budget Director Peter Orszag blamed the gap in expenditures over receipts on the economic crisis Barack Obama inherited upon taking office.
Strictly speaking, this is an inaccurate assessment in that it fails to acknowledge the record amount of spending Obama and the Democrats in Congress have proposed, promoted, and authorized in an effort to stimulate the economy. To them, as it is for many of Obama's supporters around the country, the bad news is still all Bush's fault.
The electorate may be feeling better about the economy. Data collected by the Gallup Organization in the week before the new deficit numbers were announced show "another surge in consumers' overall economic mood" alongside increased consumer spending and more positive views about the job market.
The Gallup Consumer Mood Index is based on Americans' answers to two questions regarding current U.S. economic conditions and the direction of the economy. It surged to -50 last week, the polling firm said Tuesday, reaching "a new high for the year, almost matching the Index's best weekly level since its inception in January 2008, and totally erasing the brief pullback in mood at the end of last month." Gallup cautioned, however, that the Index "indicates that consumers as a whole remain negative about the U.S. economy and its future direction" despite the improvements since early March.
Consumers' negativity has diminished significantly on both dimensions compared with early March, Gallup said, but this has been most pronounced with respect to the economy's direction. One might expect that the bad deficit numbers may lead to a new surge of increased negativity and dampen the enthusiasm that all but the most hardcore supporters of the current administration and its policies might be starting to feel. "Perceptions of current economic conditions remain much more negative than positive," Gallup says, with only 12 percent calling them excellent or good versus 46 percent giving them a poor rating. Which means the positive news rests on a very shaky foundation.
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