A key indicator of future economic growth, consumer confidence, fell sharply in the last month. The score, which is calculated every month, dropped from 62.7 in May to 52.9 this month, a decline of about 15%. It is believed that this steep decline is due to lowered expectations of an improving job market in the near future.

Why should anyone care? The reason is that for the nation’s gross domestic product to grow, individual consumption must be maintained. It amounts to about 2/3 of the economy. When consumer confidence is high, people spend more of their income since they expect that their income will permit them to maintain their standard of living. When it declines, especially sharply as it just did, people tend to spend less and save more. For long term growth, this might be nice, but the economic problems that have been with us for the last few years demand that the government seek to stop the collapse.

How can this be done? Well, it’s much more difficult than it would have been before the ill-designed stimulus plan, admittedly. We threw so much of our wealth at Wall Street, with so little positive occurring for employment in much of the nation that few cards remain to be played. I say much of the nation with the obvious exception of Wall Street which is thriving due to our beneficence. What can still be done though is what should have been done last year. First, take what stimulus dollars remain or those that will be repaid from investment ‘banks’ or insurance firms, and offer REAL banks the money, with the proviso that they loan it all out. The problem with the money given to the pretend banks on Wall Street is that they just invested the money we provided them, forcing us to pay interest for our own money. How special. Second, tell the states sorry, you’ll have to fend for yourself until the federal government gets its own fiscal house in order.