How are you feeling about your financial future? A new University of Michigan survey shows consumer confidence is the lowest it’s been since right after all the bank bailouts three years ago.
People are feeling pretty down about the country. Overwhelmingly, people think our economy is going down the tubes. Now, I’ll admit there are lots of reason why people might feel that way; we certainly have a lot of unfinished business as a country.
But it seemed the flash point that turned confidence severely down was the dysfunctional annex of Democrats and Republicans not being able to communicate like adults leading up to early August. The manufactured crisis about the debt ceiling deadline undermined our confidence in the country, which in turn translated into problems with how people perceive where we’re headed.
Yet just look at the past to see that we may not be done yet. As we move closer and closer to the 10th anniversary of 9/11, think back to that time. In addition to the anger and sadness we were feeling, there was a feeling that we’d have a broad economic collapse as people feared to leave their homes. As you know, it didn’t play out that way.
The U.S. economy was more resilient than people gave it credit for back in 2001. Likewise, I believe the economy right now is more resilient than people give it credit for today.
Of course, we do have problems specifically related to credit! We’re working off debt one step at a time, one family a time. To be sure, that will drag down economic growth going forward.
I saw an article in The Wall Street Journal that made me chuckle. They were jokingly asking, “Wouldn’t it be great if we could con people to spend themselves back into debt again?” That would be a way to get the economy moving in a hurry. But that’s nothing more than a false recovery.
The truth is, we need the painful restructuring we’re now seeing, even if it makes recovery sluggish. Our long-term recovery will be a real one that requires us to get our own household budgets in order and ultimately, that Washington do the same with our national budget and national priorities.