"It's the economy, stupid." That famous James Carville line from the Clinton campaign of 1992 encapsulates the importance of pocketbook issues in elections. It was probably voters' belief that Clinton would focus on improving the economy--in contrast to his rival George Bush the elder, who seemed out of touch with the problems of middle class Americans--that proved decisive in electing Clinton that year. The ironic part was that by the time of the election in 1992, the economy was already well on the road back to recovery, even though most people weren't feeling much improvement. In another irony, Clinton's economic program, a key element of which consisted of significantly raising taxes during a weak economy, may not have contributed all that much in the short term toward getting the country out of recession (perhaps because the country was already out of recession by the time Clinton got into office). Anyway, during the 1992 campaign, voters had the sense that the Bush administration had neglected the economy, and were therefore receptive to Clinton's promises to focus on bread and butter issues. The moment that I remember most strongly was during a town hall format debate when a woman in the audience asked the candidates how the deficit had affected them personally. Bush flubbed the question because he didn't understand it--the woman probably meant to ask how the recession was affecting the candidates, not the deficit--and Clinton was able to score with one of his "I feel your pain" responses.
We are only beginning to emerge from a much worse recession during this midterm election cycle, and voters are obviously angry that the economy does not seem to be improving very fast or at all. For many, such as the long term unemployed, things probably seem like they are getting worse. Meanwhile, the deficit is skyrocketing due to greatly reduced revenues and increased stimulus spending. Many people must conclude that the government is only making our problems worse.
When adversity hits a family or a business, we take austerity measures. If somebody loses their job, or the company's sales fall, the family or the business tighten their belts to survive. Unfortunately, when everybody cuts back, that only contributes to the downward spiral in the economy in general. And when the government does precisely the opposite of what any rational family or business would do in a downturn--namely go on a spending spree with money it does not have--that probably creates some cognitive dissonance. How can it make sense for my family to cut spending to deal with a recession, but for the government to increase spending to deal with the same problem? So my theory is that once again, and with a vengeance, voters are upset about the deficit when the thing that is actually causing them hardship is the recession. In other words, we know the economy is bad, but there doesn't seem much we can do about that. We can always blame the government for the deficit, however, because the government is not doing what any sensible business or family would do in bad times. We didn't worry so much about the deficit when times were good (even though that would probably have been a good time to reduce it), but now we are greatly alarmed.
Of course the party in power is going to get blamed in this situation, whether or not they caused the recession. And it may be that they can only assuage the voters' concerns if they demonstrate that they feel the voters' pain.