This describes a textbook drop in consumer confidence. We saw it during the debt limit deal and we’re seeing it now. The problem is that the media has described what’s actually happening so poorly that the consumer doesn’t really even know what the problem is or what they should advocate.
Do they get that the “fiscal cliff” means a combination of tax increases and spending cuts that would wreck the economy?
Do they have the conception of budget cuts being bad for the economy, after three years of non-stop panic about high deficits?
This confusion makes it very difficult to reach a solution that works for the economy.