Poll: Inflation should be fought by reducing government spending and temporary cost freezes
Photo by Eric Mcclean on Unsplash
Americans favor fellow citizens and the free market over the President, Congress or the Fed to shape inflation policies
by CRAIG HELMSTETTER and ALYSON CLARY | June 22, 2022
DOCUMENTATION
DETAILED REPORT
SURVEY TRANSPARENCY DISCLOSURE & METHODS
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Earlier this month the Bureau of Labor Statistics reported an annual inflation rate of 8.6%, the highest reported in 40 years. Last week the U.S. Federal Reserve Bank responded with the largest interest rate hike since 1994. Meanwhile, gas prices have soared to around $5 per gallon nationally, and President Biden’s approval ratings have sunk—due in part to inflation.
So what do the American people think should been done about the problem? The McCourtney Institute for Democracy at Penn State’s most recent Mood of the Nation Poll, conducted May 11-19, 2022, finds that a plurality of Americans believes that inflation is best addressed through reducing government spending, but there is little consensus. In fact, 1 in 5 reported not knowing how the federal government should fight rising costs. In addition, Americans express more confidence in their fellow citizens and the free market to address inflation than either the President, Congress or the Federal Reserve Bank.
Addressing inflation
When presented a list of six ways to address inflation, a plurality of 1 in 4 Americans supports reducing government spending. The second most popular answer is “don’t know,” followed by ordering a temporary freeze on the costs of health care, housing and gasoline.
About one in ten Americans opted for either letting the free market operate without any government policies, providing subsidies to those who most need help paying for health care and housing, and raising interest rates temporarily. Seven percent indicated that inflation could be best contained by reducing the federal regulation of business.
While there is little consensus around these options for the public at large, there is some discernable variation from group to group. The most notable discrepancies follow political lines, with Republicans tending to favor laissez-faire approaches and Democrats favoring government intervention.
“The results suggest that the public lacks a clear message for government officials on exactly how to best reign in the rise in prices, but they clearly want officials to do something.”
On the one hand, 44% of Republicans favor addressing inflation by reducing government spending, compared to only 6% of Democrats. Similarly, much higher proportions of Republicans than Democrats favor “let the free market operate without any government policies” (18% versus 2%) and “reduce the federal regulation of business” (11% versus 4%).
On the other hand, higher proportions of Democrats than Republicans favor “order a temporary freeze on the costs of health care, housing and gasoline” (31% versus 8%), “raise interest rates temporarily” (16% versus 3%), and “provide subsidies to those who most need help paying for health care and housing” (12% versus 2%).
Other, less dramatic, differences in preferred approaches to inflation include:
A higher proportion of women than men favor ordering a temporary freeze on the costs of health care, housing and gasoline (24% versus 13%).
A higher proportion of Generation Z than either Baby Boomers or members of the Silent Generation favor providing subsidies (16% versus 6% and 4%).
Almost twice the proportion of White Americans versus either Black or Latino Americans favors reducing government spending (29% versus 16% and 17%).
Who should influence U.S. inflation policy?
When asked who should influence U.S. economic policy “with respect to fighting rising prices,” over one-in-three Americans think that their fellow citizens should wield “a great deal of influence.” Nearly as many indicate that the free market should have a great deal of influence.
About one-in-five Americans believes that each of three major institutions—the Federal Reserve Bank, Congress, and the President—should have a great deal of influence on how the nation addresses inflation. Opinions are particularly divided on President Biden’s role, however, since an even higher proportion (29%) indicate that that he should not have any influence on policies related to inflation.
“Our government places responsibility for fighting inflation on the Federal Reserve Bank, Congress and the White House, but Americans are telling us they don’t trust any of them to take the right steps to reduce the rate of inflation”
Fewer, 1 in 7, think that the CEOs of the largest U.S. companies should have a great deal of influence. And the proportion of Americans who think CEOs should have no influence at all, a relatively large 30%, is statistically tied with the proportion who believe President Biden should have no influence.
Opinions about who should exercise influence over economic policies tend to follow partisan lines:
Half of Republicans indicate that the free market should have a great deal of influence compared to only 12% of Democrats.
Over one-third of Democrats think President Biden should have a great deal of influence, compared to only 10% of Republicans.
Twice the proportion of Democrats think the Federal Reserve Bank should have a great deal of influence than is the case for either Independents or Republicans (31% versus 14% for each of the latter groups).
Other notable differences in opinions related to inflation policy include:
Much larger proportions of the older Silent and Baby Boom generations think that the free market should have a great deal of influence than is the case among the younger members of Generation Z and Millennials (54% and 38% versus 18% and 20%, respectively).
Higher proportions of Black and Latino Americans think the Federal Reserve Bank, Congress, and especially President Biden should have a great deal of influence than is the case among White Americans.
A higher proportion of Black Americans indicates that CEOs of the largest U.S. companies should exercise a great deal of influence than is the case among either White or Latino Americans (29% versus 11% and 17%).
A higher proportion of those with annual family incomes below $30,000 indicate that CEOs of the largest U.S. companies should have a great deal of influence than is the case among those with annual family incomes of $100,000 or more (19% versus 7%).
In their own words: Why different entities should exercise influence over U.S. economic policy
To better understand why Americans favored the influence of one entity over others, the May Mood of the Nation survey included the following open-ended question:
“You said that with respect to fighting rising prices, <any of the six entities named in preceding question and rated as having “a great deal of influence”> should have a great deal of influence. Can you tell us why they should have more influence than <any of the six entities named in preceding question and rated as less than “a great deal of influence”>?”
While the question was asked of a wide combination of comparisons depending on each respondent’s answers to a preceding question, common themes emerged from the unstructured responses.
The most common theme to emerge from respondents’ verbatim answers to the open-ended question had to do with “American people.” Nearly one-third of respondents mentioned something to do with regular people bearing the brunt of the inflation impacts, that our elected representatives are supposed to serve the people, that the voice of the people matters above all, or that politicians were out of touch with the American people.
Over one-quarter of respondents mentioned that the entity that they thought should have a great deal of influence over inflation policy was “right for the job.” Included in this category were answers indicating either that (a) inflation policy is the selected entity’s job responsibility or (b) they have the power or control of mechanisms to be able to do something about inflation.
The third and fourth most common responses were focused on the entity that the respondent had not indicated should have a great deal of responsibility about inflation. These “anti-President Biden” and “anti-government” responses focused specifically on the perceived shortcomings of the President or other parts of government, including the Federal Reserve Bank, which some respondents felt is unconstitutional and should be abolished.
Over 1 in 10 respondents mentioned something about greed and corruption, typically explaining why they believed that either the Federal Reserve Bank, Congress or President Biden should not have a great deal of influence over inflation policy. A similar number based their reasoning on capitalism and the free market.
PARTNER FOR THIS SURVEY
The McCourtney Institute for Democracy at Penn State promotes scholarship and practical innovations that defend and advance democracy in the United States and abroad. Through teaching, research and public outreach, the Institute leverages the resources of Penn State and partners around the world to foster a model of deliberation, policymaking and responsiveness that is passionate, informed and civil.
The Institute’s Mood of the Nation poll offers a unique approach to public opinion polling. It allows Americans to speak in their own words through open-ended questions that focus on emotions like anger and hope, as well as commitment to constitutional principles.