Consumer confidence dipped to a new low in February. This unsurprising result comes in the wake of the ungodly stimulus plan recently signed by the President. The confidence measure is called the “Present Situation Index.” Mr. Obama would be well to pay attention: his own present situation index continues to sink. Low consumer confidence is not an independent parameter that can be adjusted by governmental action. It is an aggregate of families’ assessment of present conditions, future expectations, and the fears and uncertainties associated with both. The reason confidence continues to be low is not because the almighty state has failed to spend enough tax dollars. Consumers instinctively know what a bad idea is, and they have no confidence in the recent massive governmental intrusion. Mr. Obama could, tomorrow, inspire all the consumer confidence he needs if he would aggressively pursue spending cuts to reduce the burden of government borrowing on the economy, along with major tax cuts on capital, investment, and productive income.

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