Reply #5: To some degree the economy is affected by psychological issues [View All]

[NJmaverick]

If people believe in the economy and have confidence, they tend to behave in a manner that spurs economic growth and prosperity. If they are fearful then the opposite happens. So those trying to tear down the economy and undermine people's confidence are certainly not helping the situation.

example of the behavior I am talking about:

A confident and optimistic business owner/manager hires more people and buys more goods to improve production

A confident consumer spends more money buying goods and services

Investors take money out of useless investments like gold and other commodities and put it into stocks and other productive investments.