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Mass. poll: Deep fiscal concerns

Survey finds many cutting back, and doubting bailout

By Todd Wallack
Globe Staff / September 28, 2008
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Massachusetts residents are deeply troubled by the nation's faltering economy and say they are bracing themselves for harder times - cutting back on travel, meals out, and other discretionary spending, according to a Suffolk University/Boston Globe poll.

Of those polled last week, almost twice as many expect the economy to worsen than improve by the end of the year. And they view the perilous state of the nation's finances as far and away the leading issue for them in deciding who should be president.

"People are hunkering down. They're taping their financial windows and doors shut," said David Paleologos, director of the Political Research Center at Suffolk University, which conducted the poll between Monday and Thursday in partnership with the Globe. He said the results show "the first impact of the financial meltdown."

But most of those polled do not support President Bush's proposed $700 billion bailout to address the crisis. Only 29 percent say they support the plan.

Their focus is clearly on their own fi nancial concerns. Despite attempts to cut back, more than half the 400 people polled said they spent more over the past year, presumably because of the rising cost of food, heating oil, gas, airline tickets, and other expenses.

And they say they are nervous about almost every aspect of their personal finances. About 77 percent said they are somewhat or very concerned about the safety of their investments, 59 percent said they are worried about paying heating bills, 31 percent fear they won't be able to keep up with mortgage payments, and 23 percent fear that their jobs may be in jeopardy.

The poll, which has a margin of error of plus or minus 4.9 percent, according to Paleologos, was conducted as lawmakers in Washington debated the bailout plan drawn up by Treasury Secretary Henry M. Paulson and Federal Reserve Chairman Ben S. Bernanke to buy back troubled mortgage securities and other assets from ailing investment firms. President Bush has urged quick agreement on the proposal, saying core elements of the nation's economy are at stake. Momentum for a deal gave way late in the week to partisan infighting, but leading figures in the Capitol said yesterday they believe a compromise agreement may be unveiled as early as today.

In interviews, some of those who participated in the poll said the economic downturn is affecting them in a variety of ways.

Barbara Hubbard of Hubbardston said she is literally burning some of her savings - withdrawing money she had set aside for retirement to buy wood pellets for a stove and save on heating costs. Hubbard, 70, said she wants the next president to do more to address energy issues, such as offering more incentives to conserve fuel.

Mary Granfield, 47, of Belmont, said she and her husband wonder whether the economic downturn will make it harder to save money for their daughter to go to college four years from now.

"We don't have forever," said Granfield, who added that she is reluctant to check her investment fund balances these days. "It's a scary time," she said.

Mark Giovannucci, 48, of Leominster, hopes problems with major banks and other financial institutions won't affect his small electrical contracting business.

"So far, my customers seem to be all right. But when [business slows], it usually happens quick," he said. "The phone goes dead."

Harry Woodland, 83, said he is considering moving money to multiple banks to make sure it is fully insured by the government, even though the Saugus resident doesn't believe his bank is in immediate danger of failing. "But who knows?" Woodland added.

And Lauralyn Dyer, 36, is planning to attend veterinary school, but frets that she could have difficulty obtaining student loans because the troubles on Wall Street have led to a national credit crunch. Even if she can borrow money, Dyer said, she is unsure whether she will earn enough to pay off the debt after graduation. "I don't know what the future holds," said Dyer, who lives in Dunstable.

Despite the widespread uncertainty about the economy - which economists believe is probably already in recession - a majority of those polled did not think Congress should immediately approve another economic stimulus package, similar to the one adopted in February. In fact, they said the federal tax rebates sent out earlier this year did little or nothing to ease their financial situation, with only 6 percent saying the money helped their household "a lot."

By a slim margin - 46 percent to 38 percent - residents said the federal government should provide immediate assistance for homeowners facing foreclosure. Support for mortgage assistance was strongest among the elderly and renters.

The Suffolk/Globe poll mirrors other recent measures of how consumers perceive the economy. In July, the Massachusetts Consumer Confidence Index fell to its lowest point since it was launched in 1991. And in political surveys in Massachusetts and across the country, people have increasingly said the country is headed in the wrong direction.

"There are huge amounts of pressure being put on households and consumers," said Michael Goodman, director of economic and public policy research at the University of Massachusetts Donahue Institute, which tracks the state's economy. "You have rising prices and declining values of homes and investments. And if you think about the constant drumbeat of very negative news, based on very real negative events, it's understandable that people are agitated about the economy."

The economy is also key to how people view the presidential campaign, according to the Suffolk/Globe poll.

Half of Massachusetts residents say the economy will be the biggest factor in their vote for president, far ahead of other issues like the Iraq war, healthcare, terrorism, and taxes.

By some measures, Massachusetts has weathered the economic storm better than the country as a whole. The state's unemployment rate was 5.3 percent in August, compared with 6.1 percent nationally. But the state's rate has jumped nearly a point since the beginning of the year, indicating the state's economy may be rapidly weakening. It is a dreary picture, but even so, "things are relatively better" in Massachusetts, Goodman said.

Todd Wallack can be reached at twallack@globe.com.

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