Americans Confidence Soars to Over Confident Level

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence climbed to 65.1 in April from 57.3 in March. That was the highest since September 2008 and the biggest one-month increase since October 2006. Is this a favorable sign for a fast improvement in the US economy or yet another sign that Americans really have no concept of what is in store for them in a long crisis in a rapidly changing world?

Most of the gain can be tied to consumers’ favorable assessment of U.S. President Barack Obama’s stimulus spending, Curtin said. The survey found that 65 percent of consumers thought the stimulus would improve the national economy.

“The improvement was concentrated in expectations for the future, especially the longer-term outlook for the economy,” said Richard Curtin, the director of the survey.

Americans have always been an impatient people. If there is a problem they want it fixed and fixed now. In the past this national trait of impatience has often served Americans well. The nation became a world leading powerhouse by aggressively pushing forward in times of crisis and working towards solutions.

Unfortunately this time may be different. Consumers seem to base their new found confidence on the effectiveness of President Obama’s stimulus plan as a means to improve economic conditions. What this is really saying is that Americans believe that they can return to the happy shopping, consumer oriented, drive around in la la land, days of yore. They believe that President Obama can bring back the past and that once again the “American way of life” will reign supreme in the world.

It doesn’t seem to matter that restoring an economy that fell deathly ill due to the creation of the greatest credit and debt balloon in the history of the world by creating yet more debt is illogical. You don’t cure an illness by exposing yourself to more of the same virus and by following the same poor hygiene practices that helped to bring on the disease.

But poor President Obama. He knows that Americans want a quick fix. A long lasting crisis that requires Americans to take bitter medicine in order to get well for the long term is beyond their comprehension. So Obama is administrating a potent stimulus plan. It is a lot like giving a dying patient a heroin injection. You will likely get a fast reaction but the final outcome is still going to be a fatality.

President Obama seems to be a decent hard working sincere man. It’s a shame that he and his economic team are in the process of bringing American’s confidence in the future back to an over confident level. It means that the hard decisions as to what must be done to restore America’s industrial base and to maintain a high savings rate over the long term will not be made.

The return by Americans to a borrow and spend consumer economy will insure that American power and influence in the world continues to decline. Ignoring how the world has and is changing and restoring the good old days of a consumer and financial services economy will put America on the path to third world status.