A majority of people in the United States feels the economy is currently mired in recession, a new Rasmussen Reports survey finds.
The poll found that 60 percent of consumers believe the U.S. economy is currently in a recession, while 22 percent disagree.
Among investors, 58 percent say the economy is in a recession, while 28 percent say it’s not.
Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible
The Rasmussen Consumer Index, which measures consumer confidence on a daily basis, slipped 2 points on Wednesday to 83.9. The consumer index is down 2 points from a week ago, but is up 2 points from a month ago and 3 points from three months ago.
The Rasmussen Investor Index dropped four points on Wednesday to 95.3. Investor confidence is down a point from a week ago, but is up 7 points from a month ago and 4 points from three months ago.
Fears the United States will slide into a recession next year have been growing thanks to a fast-approaching and very sharp fiscal adjustment that will strike on New Year’s Day.
At the end of this year, the Bush-era tax cuts and other tax breaks and benefits expire at the same time automatic cuts to government spending kick in, a combination known as a fiscal cliff that could send the country into a recession next year if left unchecked by Congress.
Lawmakers have been unwilling to address tax and spending issues in an election year, though some have suggested they can reconvene after elections or even in early 2013 and deal with the problem with retroactive legislation.
The nonpartisan Congressional Budget Office estimates that the economy could contract by 0.5 percent next year and unemployment rates would rise to around 9 percent by late 2013 if lawmakers fail to steer the country away from the fiscal cliff.
Add to that, uncertainty surrounding the cliff alone is hampering recovery, as businesses put off plans to invest, expand and hire until they know how much they will be paying in taxes.
Fears political brinkmanship that nearly threw the country into default during the 2011 debt-ceiling debacle will return anew have many concerned, as well.
“The level of political partisanship in Washington is higher than it’s ever been, and that is making it much harder to deal sensibly with some of the economic and other problems America is facing,” said Xenia Dormandy, a senior fellow at Chatham House, a think tank in London, according to Reuters.
“The American system is designed to have checks and balances and that’s what’s happening. But it does mean that in times like this, when strong responses are needed, they’re not forthcoming,” she added.
Editor's Note: Economist Warns: 50% Unemployment, 100% Inflation Possible
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