Why we need better economics education

Poll: Most say stimulus has not helped middle class

A CNN/Opinion Research Corp. survey released Wednesday morning indicates that 25 percent of the public thinks the stimulus has benefited the middle class.

One-third of the people questioned think the stimulus has helped low-income Americans, with just over four in 10 saying the plan has benefited business executives. A majority, 54 percent, think the stimulus has helped bankers and investors.

The pollster admits:

"Opinions on the economic stimulus bill are colored by the perception that it has helped fat cats, but not ordinary Americans," said CNN Polling Director Keating Holland. "It's possible that the belief that the stimulus bill helped bankers and CEOs is due to the public confusing the stimulus bill with the various bailout bills that were passed at roughly the same time last year."

Actually, I think this problem is ubiquitous. It is impossible to believe that the stimulus helped bankers if you know how the money is allocated. But after (1) giving every family in America an $800 tax credit, (2) shoring up states' Medicaid money, (3) stabilizing state education budgets, and (4) boosting unemployment aid and COBRA subsidies, Obama still has to fight off accusations that the stimulus was a handout for bankers. These 4 expenditures accounted for the vast majority of the stimulus money...especially what has been spent so far. Thanks to these four expenditures, millions of people are insured against health catastrophes, hundreds of thousands of extra teachers are in schools, and state and local taxes have stayed low...despite would-be calamitous budget shortfalls by state and local governments.

None of the stimulus money went to banks or investors, except as profits on things that consumers spent their stimulus money on. It is depressing that people confuse the bailouts with the stimulus, and even more depressing that they think Obama initiated the bailouts. The $800 billion TARP program started under Bush, and, as he was on his way out, Bush pried open TARP to bail out General Motors and Chrysler. It is true that Obama supported these things, but that isn't the same as the public's belief that he is the one who executed them. Under his watch, Tim Giethner did the bumbled AIG bailout, but, again, this was a case of the Treasury secretary executing a program--a program previously established under Bush's Secretary Paulson--as it was intended to be executed. He might have done a poor job and cost tax payers as much as $20 or $30 billion. This is about how much America spends on farm subsidies per year, which is a well-established waste of money that virtually no one has studied and then supported. And now, by a long string of associations, Obama's stimulus package helps bankers.