As people on Wall Street and Main Street hold their breath to see if a federal bailout of the nation’s financial institutions will work, Americans are starting to speak — not whisper — the word “depression.”
In a sign that anxiety is growing, 33 percent of 1,011 adults recently surveyed by USA Today and Gallup said the economy already is in a depression (though by economists’ measures it is not). Just 12 percent said that 10 months ago.
Seventy-three percent said the nation’s financial troubles will get worse before they get better. They expect their taxes to go up, and many worry about affording retirement or maintaining their standard of living. Nearly half worry about their homes losing value; 20 percent are seriously looking at taking money out of the stock market.
Trust is shifting from stocks and real estate to federally insured bank CDs. And nearly 30 percent have postponed, or are thinking about postponing, a big purchase. Almost half of those with jobs are more worried than before the Wall Street crisis means their pay or benefits will be cut.
But beyond the current woes, 58 percent of Americans see better economic times ahead — in just a year. Only 3 percent think the economy is growing now, but 42 percent expect it to be growing a year from now. While 69 percent say we’re in a recession or depression, only 36 percent think it will be that bad in a year.
And in fact, the economic woes are nothing close to the Great Depression.
Regardless of what people think, Americans are changing their financial habits and a majority, 64 percent, are worrying about their retirement. The percentage who are “very” worried has risen to 33 percent from 25 percent in April 2002.
Contributing: Stephanie Armour, Sharon Carty and David Lynch
