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If you were president, what would you do about the economy?

If you feel that reducing the deficit is more important than stimulating the economy, you've got lots of company, at least among Financial Executive readers. Eighty-four percent of the readers who responded to the One-Minute Survey in our September/October issue say they would hold out for reducing the deficit rather than instituting new spending programs. And they would do it, first, by reducing entitlements (64 percent); second, by instituting across-the-board reductions in the staffs of federal agencies (60 percent); third, by reducing foreign aid (44 percent). The least popular way to reduce the federal deficit is to increase taxes, allocating a specific amount to deficit reduction (28 percent).

But if they were to stimulate the economy, the majority (57 percent) would use the investment tax credit; 50 percent would reduce the capital gains tax rate. Twenty-two percent say they would give money to state and local governments to invest in infrastructure, and 17 percent say they would lower the personal income tax rate.

Among other solutions to the burgeoning deficit supported by our readers is the need for government to clean up its act. Says one respondent: "Government must get itself under control. It is light-years behind private industry (including the service sector) in addressing productivity." Cutting defense spending, increasing the tax on gasoline, and giving the President the line-item veto were also frequently mentioned as solutions to the problem.

Readers had a number of other suggestions on how to reduce government spending. They range from the "bite-the-bullet" type of recommendation to the reallocation of resources, combined with simplicity and consistency. Here are some representative comments: "This is an issue of living beyond our means. The solution is hard to accept, but real simple in practice. Balance the budget and live with it!" "Cut or drop entitlement programs that spend less than 75 percent of their funds on the targeted recipients." "Cap federal spending to today's levels, and institute a simplified personal tax rate at a fixed rate on gross income." "We need stability in government programs. Let's get a tax structure and leave it in place so business can plan with confidence." "Spending must be reallocated to stimulate investment and job creation. Funds come from significant reductions in entitlements, foreign aid, and staff reductions of federal agencies."

And finally, a few voices that put our current situation in perspective: "Things are not good, but they are far better than the 10.8 percent unemployment |we had~ in 1981 with the 21 percent prime rate. By 1996, most of us will yearn for the 'good old days' of 1992!" But underlying it all is uncertainty: "We are in a psychological depression! A lot of money has been accumulated, but it is not in circulation. People are scared--scared of the future."
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Title Annotation:Financial Executive: One Minute Survey Results
Publication:Financial Executive
Date:Nov 1, 1992
Previous Article:Business 2001.
Next Article:Can honesty be legislated?

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