Forget Iraq, it's the economy. (Investments & Finance).

ECONOMISTS on Wall Street have challenged Federal Reserve Chairman Alan Greenspan's contention that the only thing holding the U.S. economy back is the possibility of war with Iraq.

Now Main Street is taking Greenspan to task as well. By an 86 percent to 8 percent margin, employees of private companies think it's the state of the economy, not the possibility of war, that's hurting businesses right now, according to a recent Gallup/UBS Employee Outlook Index poll.

The Feb. 3-6 telephone poll surveyed 322 adults who work at non-governmental, for-profit companies. While the survey sample wasn't large, the lopsided results suggest size wasn't the issue.

About three-fourths of those surveyed on a variety of questions pooh-poohed a possible war as an excuse for what ails corporate America, according to Gallup. Eighty percent said the war was having no effect on hiring at their company. Seventy-one percent said it was having no effect on business. And 70 percent said it had no effect on company growth.

The biggest impact of a possible war, according to the Gallup/UBS poll, was on profitability. Twenty-three percent of employees said the profit picture at their companies is worse or much worse because of the war threat, 11 percent said it's better or much better and 64 percent said it had no effect.

"When the war does arrive, it may not bring the sustained economic improvement many economic. prognosticators are anticipating, even if everything goes well," Gallup said.

In congressional testimony, Greenspan advised against additional fiscal measures to stimulate growth, suggesting there was always time later if the resolution of geopolitical uncertainties didn't lift the fog hanging over the economy.

Never mind that fiscal policy's cumbersome legislative encumbrance means it's too much, too late. Greenspan's "working assumption is that the weak U.S. economy will soon rebound," said Mark Zandi, chief economist at Economy.com. "This view is based on the thinking that the economy is fundamentally sound and is being weighed down by a lack of confidence stemming from heightened geopolitical risks, the most notable being the looming conflict with Iraq."

While sympathetic to the argument that the general level of angst is depressing investment below levels suggested by low interest rates and weak growth of capital, Zandi challenged Greenspan's course of action.

Implicitly or explicitly, the chairman is saying the Iraqi conflict will be resolved soon and successfully, raising confidence and restoring economic growth, Zandi said. And even if Greenspan wrong, policy makers can always inject some monetary or fiscal stimulus later.

"Each of Chairman Greenspan's working assumptions is questionable," Zandi said. "What are the implications if he's wrong? What's the downside if they do provide some (fiscal) stimulus? The economy's sole source of growth is derived from increasingly cautious consumers," whom Zandi sees as stretched.

Zandi points to some key signs of stess: the personal bankruptcy rate, auto repossession rate on direct loans, mortgage foreclosure rate on conventional mortgages and net charge-off rate on credit cards are all at record highs; the mortgage delinquency rate for mobile homes is just off its record high.

In terms of a war with Iraq, even a best-case scenario -- a quick air war, little Iraqi resistance, intact oil fields and liberated Iraqis dancing in the streets -- would only solve one "geopolitical risk," if that. The war on terrorism goes on. Groups like al Qaeda have threatened terrorist attacks against the U.S. in the event of an attack on Iraq.