2009Jun26 Consumers remain pessimistic

This week’s poll results examine how respondents view their current financial situation and the near term future. The poll was not scientific and was driven by radio listeners of the syndicated Don Creech Radio Show and subscribers to its “Week in Review” email. Listen or subscribe at www.DonCreech.com.

 

If you have a home equity line of credit is the balance increasing or decreasing?

 

Nearly three quarters of respondents indicated their credit balances are continuing to increase during this recession. Home equity lines of credit kept our economy moving after the tech bubble burst in 2000. While some banks have withdrawn or reduced available credit, it is not completely gone. However, when viewed collectively, the respondents remain fairly pessimistic for the near term.

 

If you use a credit card is the balance increasing or decreasing?

The identical number of respondents indicated that their credit card balances are increasing. This indicates that there is stress on families to either maintain lifestyle or, possibly, provide for necessities where incomes have declined.

 

Is your current economic stress level increasing or decreasing?

It is no surprise that more than 80% of respondents answered in the affirmative. Whenever household debt is increasing, there is a feeling of losing control of one’s own destiny. This adversely impacts both short and long-term planning objectives. If this is combined with fear of possible job loss or reduction in hours and pay, juggling priorities becomes both more difficult and more important. A plan for managing cash flow becomes very important to stay current with credit obligations while preparing for contingencies.

 

Looking ahead to the next six months will your economic position be improving or declining?

Nearly two thirds of respondents do not expect their economic position to be improving. Consumer confidence typically requires a sense of job and income security both of which have had much negative news this year. Consumer pessimism is reinforced by statements from Warren Buffet that our economy is a mess and by the Fed that the recession will be longer than expected.

 

Looking ahead to the next six months will the Stimulus Bill’s impact on our economy be positive or negative?

Nearly three quarters of respondents do not believe the Stimulus Bill will have a positive impact within the next six months. This is probably a very realistic evaluation since the majority of expenditures are scheduled around the 2010 and 2012 election cycle. The “critical nature” of the Stimulus Bill was certainly misrepresented by our political leaders. There is very little stimulus money being spent on “shovel ready” jobs. Without being spent, there can be no stimulus.

 

Does the current economic crisis pose a greater threat to the quality of your life than terrorism?

More than eighty percent of respondents rate current economic problems as a greater threat to their quality of life than terrorism. That is actually a positive affirmation of the government’s success in containing and/or reducing the appearance of terrorism as an imminent threat. This is probably supported by the news streams which have been emphasizing the economic malaise over the wars in the mid-East.