We have all heard the disappointing news reports and the ominous predictions of economists, but what exactly can be done about this failing economy? Surprisingly, quite a bit.
If we could all take a moment to disregard foreclosure trends and debt issues, we might be able to focus on a strategy to bring back consumer confidence. Previous studies have concluded that when consumer confidence is high there is a reduction in negative attitudes towards the economy. Further, a drop in consumer confidence has, historically, preceded large dips in the economy. This suggests that consumer confidence plays a key role in economic functioning.
It appears as though what we need the most in this unstable economy is confidence and positive attitudes towards the fate of our economy. However, this theory isn’t necessarily easy in practice.
Despite recent reports of an increase in consumer confidence, numbers on paper don’t always translate. Many people are hesitant to invest or make large purchases in key markets, like housing and automobiles. Many more can barely pay their bills, let alone begin to save for a rainy day or retirement.
What Can We Do?
The most important aspect of consumerism during an unsteady economy is patience. Many people are tempted to liquidate their stocks and buy up large shares of solid commodities, like gold. However, this is a defeating strategy that often leads to further economic turmoil.
Local governments should look towards finding affordable ways for consumers to put money into the economy and stimulate the markets. For example, holding local activities and hosting sporting events are common ways to pump money into local markets and spur economic development locally. One such event is the America’s Cup World Series sailing championship event in Newport, Rhode Island. Nearly 100,000 people are expected to attend the event bringing with them money for hotels, restaurants and local tourist attractions.
A little patience, optimism and spending can go a long way.