Big Issue: Voters fret about financial uncertainty

This was once supposed to be a presidential election about the war in Iraq, or maybe the future of health care.

But with wages falling, inflation rising, and a shaky stock market, voters now rank the economy as the top issue. In an Associated Press-Yahoo News survey of voters last month, 90 percent said the economy was important or extremely important. That's more than any other issue.

At the root of the nation's economic troubles is the collapse of the housing market.

"It's spiraling down on itself," economist Barry Bosworth said. "As prices go down, more people are forced to get out of their homes. They're putting more houses on the market and that's accelerating the home price decline."

The decline in the housing market has affected nearly all sectors of the economy, causing unemployment to rise, consumers to cut back on spending and the credit market to seize, sending the stock market plunging.

The government has responded in unprecedented ways. Earlier this month, Congress passed a $700 billion financial bailout plan, which was supported by both Barack Obama and John McCain. The goal is to prevent further weakening of the U.S. economy and ease the credit crunch, which has made it difficult for many businesses and individuals to obtain loans.

Thus far, though, the rescue plan has done little to stabilize financial markets. And even if the bailout has a positive impact on the economy, Bosworth said, the next president will find it difficult to provide Americans with short-term relief.

"Because we started this whole episode with a terrible fiscal situation in the U.S., we just don't have the room to do much," he said.

Many Americans are skeptical about how much the next president can do about it all. The view from three American households:

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RENAE DORMAN, 28, Scottsville, Va.

It's been nine months since Dorman's husband lost his job as an auto mechanic.

It wasn't a high-paying job, Dorman said, but it was enough to support the couple and their two young children. Most importantly, it came with full benefits.

Now, all Roy Dorman can find is part-time work or minimum wage jobs.

"The average employee who makes $12 or $13 an hour still struggles from paycheck to paycheck," he said. "You look at minimum wage, that's nothing nowadays."

Roy Dorman works part-time for a tree-trimming company four days a week and goes job hunting on his off days. Renae Dorman's mother has come out of retirement to help the couple make ends meet.

Dorman is confident her husband will find work eventually, but worries about how long it will take.

"I won't say we argue about money, because we really don't," she says, "But there's still tension with not being able to pay the bills or pay them on time."

With the economy struggling, Renae Dorman, a Republican, considered voting for Democrat Obama. But with little hope that either candidate can make significant economic changes, Dorman decided to stick with her party and vote for McCain.

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MICHAEL KLEMM, 36, Girard, Pa.

Klemm knows the struggles on Main Street - literally.

Klemm's Italian restaurant and pizzeria sits on Main Street in Girard, Pa. Business used to be brisk, but lately his customers are cutting back on eating out.

"People don't have the money to put forward anymore," Klemm said. "It's mac-and-cheese and hot dogs on the table a lot more than it used to be."

Klemm also is contending with rising prices on everything from cheese to flour. The price increases have forced some of Klemm's competitors out of business.

So far, Klemm is finding ways to make do. The restaurant now offers more low-cost items, and Klemm himself has walked door-to-door trying to attract new customers. And when times get really tough, Klemm said he's the one who tightens his belt.

"The employees have to get paid, the suppliers have to get paid," he said. "The only ones who don't have to get paid are the owners."

A Republican who supports small government, Klemm is tepid in his support of John McCain.

"I'm voting for him because he's the lesser of the two evils, not the one I think can solve everything," he said.

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DANIEL SIMMONS, 77, Las Vegas

Warm weather and a low cost of living lured Simmons to Las Vegas more than 10 years ago.

A retiree on a fixed income, Simmons chose to rent an apartment instead of buying a home. But all around him, the Las Vegas housing market boomed.

Then, the bottom fell out, leaving Las Vegas with a plethora of new homes sitting on the market and one of the highest foreclosure rates in the country.

Homeowners aren't the only ones affected, Simmons said. Many of those who lost their homes have joined the rental market, forcing rental rates up. Simmons said rents at his apartment complex have doubled since he first moved to the area.

"They're resorting to coming into places like this," Simmons said. "They have several suites where you can rent by the week, and they're overflowing by people who have lost their homes."

Simmons hopes he can stay in Las Vegas. He likes the weather and the people. It's a good place for his disabled son, who lives with Simmons. But if rents continue to rise, Simmons said, he'll considering leaving.

Simmons, a Democrat, supports Obama. Still, he's not impressed with either candidate's economic plan.

"I haven't seen a whole lot of bite from either candidate as far as the economy," he said. "I don't think they know what to do."