There's no doubt that for most voters who go to the polls in next week's midterm elections, the biggest issue is the economy. It's an issue that has bedeviled the Democrats. They've argued they inherited huge problems that could have taken the country back to the Great Depression had it not been for the programs that they put in place. But with unemployment at 9.6 percent and foreclosures continuing to mount, that argument hasn't gotten much traction.
Even some positive news for the most controversial programs has failed to help the Democrats. Take the Troubled Asset Relief Program, known as TARP.
When it was passed by Congress, TARP provided up to $700 billion to shore up wobbly banks. Then it was extended to rescue General Motors and Chrysler. The insurance company AIG got tens of billions, too.
Initially, people thought, well, just add $700 billion to the deficit; that's what it's going to cost. The first official estimates from the Congressional Budget Office projected a loss of around $350 billion. That estimate was later revised to a little over $100 billion.
But now that all the big banks have paid back their debts, with interest, it looks like the government will get back a lot of what GM and AIG received. The total loss to the government is likely to be less than $50 billion, according the Treasury Department.
The Obama administration has tried to point this out to counter some of the criticism it is getting on the economy, but that counter-argument doesn't seem to be having much effect. That's partly because there's a good deal of confusion about TARP among voters. For example, only a third of Americans know TARP was actually proposed by the Bush administration and signed by President Bush, according to a poll from the Pew Research Center. That complicates the Obama administration's desire to take credit for its falling price tag.
But in the end, most voters are probably not following the details enough to know TARP's cost will be a fraction of initial estimates. What sticks in their minds is that TARP was used to bail out big banks, not that it might have saved the financial system at a relatively small cost.
The Democrats have similar problems with the stimulus bill. Polling shows a majority of Americans believe more than half of the $787 billion was wasted. That's an interesting number, especially when you consider that more than a third of the cost of the stimulus was tax cuts that benefited 95 percent of Americans. A lot of people have forgotten that, partly because the tax cuts are being delivered at the rate of about $60 to $80 a month in your paycheck, so it's not very noticeable.
The real problem with the stimulus, though, is that it hasn't done much to bring down the unemployment rate. A lot of mainstream economists believe the stimulus did create or save several million jobs. But that's barely made a dent in the number of jobs lost.
And the unemployment rate remains at 9.6 percent, close to its peak. Given that, it's hard for Democrats to make the case that voters should support them because things could have been much worse, or that things are very slowly getting better.
If you're one of the millions of people who've been out of work for more than six months, or are facing foreclosure, that's a pretty hard sell. And people who still have jobs continue to be afraid they'll lose them, and that they might lose their homes, too.
When you have an economy in this kind of dismal shape, the party in power gets the blame. President Obama has admitted that his party has not found an effective way to counter that, and at this point, just a week before the election, the Democrats are running out of time.
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