Public Expects Healthier Economy : But Poll Reveals Growing Concern About Nuclear War

The American public entered 1985 with strong confidence in the economy but growing concern about the threat of nuclear war, a poll released Thursday reveals.

More than four out of five Americans believe that six months from now the economy will be as healthy or healthier than it is today. As concern about unemployment and economic issues wanes, however, the public is focusing increasing attention on the threat of nuclear war.

The poll of 1,017 adults was conducted in early January by Public Policy Analysis Inc. of Somers, Conn., and its results were presented Thursday at a conference sponsored by the New York Stock Exchange, the Los Angeles Times and the UCLA Graduate School of Management.

The meeting, titled “The Major Issue Facing America: Public Policy and Economic Growth,” brought together business, government and academic leaders to discuss strategies for resolving conflicts over taxes, deficits, trade and technology.

NYSE Chairman John J. Phelan Jr. said that, after decades of increasing government involvement in economic matters, “a period of reassessment is under way.” The key question before the conference, he said in a luncheon speech, is not whether the government should intervene in market decisions but “how much and in which way.”

Rep. Thomas S. Foley (D-Wash.) told the group that there is “near-unanimous agreement” in Congress about the need to reduce the federal deficit and rewrite tax laws.

“We hope to resolve these issues without going to the precipice. The President is going to have to use his tremendous popularity to force a (national) consensus on taxes and deficits,” Foley said.

Foley’s claim of congressional unanimity on the need for tax reform drew a one-word reply from conservative Republican Rep. Dick Cheney of Wyoming. “Hogwash,” he said.

“There are some fundamental differences on many of these questions. Many of us believe those advocating tax reform have a hidden agenda--higher taxes. We will fight to avoid at all costs anything that even remotely resembles a tax increase,” Cheney said.

This and other disputes were discussed in workshops led by, among others, Rep. Richard Gephardt (D-Mo.), former NYSE Chairman William M. Batten, Sen. Alan Cranston (D.-Calif.) and United Auto Workers Vice President Donald Ephlin.

The survey released Thursday was the sixth in a series that began in 1982.

At that time, unemployment was cited as the nation’s top problem by 46% of respondents. That figure has shrunk to 24% today. On the other hand, the number of people naming nuclear war as America’s chief concern rose to 26% from 17%.

“One of the surprises of this survey is the stressing of nuclear war over economic developments,” said Phelan, who presented the findings at a morning press conference. “This serves to highlight the fact that the economy is doing very well.

“The likelihood that you’re worrying about being vaporized depends on whether your stomach is full or empty.”

Another unexpected response cited by John Bowles, president of the polling firm, was a public desire for tax simplification, even if it means higher taxes. In addition, a majority supports a deficit-reduction plan that includes modest cuts in defense spending coupled with tax increases.

When asked how to reduce deficits, 53% identified the military budget as a potential target for cuts, but only 15% thought there should be further reductions in spending for social programs.

The Reagan Administration’s emphasis on reducing government involvement in business appears to have trickled down to the public. About 78% of the respondents said they believe that the economy would work better if government simply created incentives for the private sector or stayed out of economic matters altogether.

The poll also found that:

- People generally feel that inflation has been brought under control. Nearly nine of 10 believe that prices will stay the same or rise only a little over the next six months.

- More than 80% of those polled said they were worried about toxic wastes polluting drinking water and residential neighborhoods. The public believes that government and industry should share the burden of cleaning up current problems and preventing future contamination.

- Americans want tax simplification, but not at the expense of their favorite deductions, those for state and local taxes and home mortgage interest. By 56% to 33%, respondents would support a flat-rate tax, if those cherished deductions were saved.

- By a narrow margin, the public supports government attempts to regulate business mergers and acquisitions.

- Three-quarters believe workers should be allowed representation on corporate boards and have a role in making company policy.

- By 58% to 38%, the public supports continued limits on Japanese auto imports, even if it means higher car prices.

- Americans think government is relatively effective in bailing out banks that get in trouble through bad loans to foreign governments. But the public doesn’t think it should.

“Most of these findings are good news for business, but there are some clouds on the horizon,” Bowles said. “Should the economy falter, an active program of government intervention in the economy would be supported by a majority of the public.”

He also cited findings that public confidence in business self-regulation is declining and that continued problems with toxic wastes may spur a call for increased government enforcement of tough environmental laws.