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Re: How would you fix the economy and budget issues?
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Originally Posted by Schneed10
Yeah well, duh. But WHY was consumer confidence eroded so badly?
Don't forget, people are reactionary beings. Consumer confidence got crushed because suddenly layoffs were popping up and housing prices were on the decline. When loans can't be had as readily and jobs are hard to find, of course consumer confidence erodes.
Consumer confidence is the ultimate SYMPTOM of a flagging economy. It's never the cause. But it can be the cause of LAG in recovery. A recovery won't happen until people are willing to open their wallets. But they won't open the wallets until they're convinced things are improving, which requires substantial improvements in the job market first and foremost.
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The loss of confidence in the housing marked is primarily responsible for the current economic downturn. It's that simple.
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