As the Aug. 2 deadline looms, Congress is faced with a “lady or the tiger” conundrum: Raise the debt limit or, for the first time in its history, allow the government to default? A recent national survey by the Pew Research Center for the People & the Press and the Washington Post finds that more Americans—nearly half of those surveyed--are concerned about the national debt growing beyond its current limit of $14.3 trillion. Thirty-five percent said they are more worried about the consequences if the government should be forced into default.
The National Debt, along with a Prolonged Economic Downturn, is of most concern to investors across all wealth levels, according to a new survey by the Spectrem Group. Of investors with a net worth between $500,000 and $1 million (not including primary residence), it is especially of concern to baby boomers ages 55-64 (77 percent) and 65 and up (78 percent). It is of the highest concern in Millionaire (76 percent) and Ultra High Net Worth (81 percent) households, and especially among the oldest investors (81 percent of senior Millionaires and 85 percent of senior UHNW investors).
The Pew study, conducted May 19-22 among just over 1,000 adults, found that by more than a two-to-one margin (60 percent to 25 percent), Republicans say their greatest concern is that raising the debt limit would lead to higher government spending and increase the national debt. Independents, by 49 percent to 34 percent, also concerned that raising the debt limit would lead to more spending and more debt. Nearly half of Democrats (48 percent) identify say their greater concern is that not raising the debt limit would lead to a government default, but 38 percent say they are more concerned that raising the debt limit would lead to higher spending.
The dilemma for politicians, the Washington Post observed, is that while the Treasury needs to keep borrowing to pay the government’s bills, lawmakers are mindful of voter anger should the debt spiral out of control.
By a margin of 52 percent to 37 percent, people who feel like they have a fairly good understanding of the consequences of not raising the debt limit say their greatest concern is that raising the limit would lead to higher government spending. Perhaps a more troubling statistic is that, according to Pew, nearly half (45 percent) said they did not fully understand or did not understand at all the impact of not raising the debt ceiling.