Also, the bad debts raise anxieties about the security of the banking system, further undermining consumer confidence.
He said it would be a very negative development if Zimbabwe traded its diamonds illegally, possibly undermining consumer confidence.
Sylvester Eijffinger, an economist at Tilburg University, warned that the government risked getting caught in a "dead-end" cycle of cuts, with each new round further undermining consumer confidence and further worsening the domestic economy.
"They will not quit," said Christine A. Callies, chief United States investment strategist at Merrill Lynch, "until they achieve success in turning around capital spending and compensating for the negative wealth effect" undermining consumer spending.
Claims by National Grid that additional changes risk further undermining consumer and investor confidence came the day after a parliamentary report was severely critical of government for a series of U-turns on policy since the general election last May.
Facebook Twitter Google plus Share Share this post Facebook Twitter Google plus close 4.28pm AEST07:28 NSW Labor senator Sam Dastyari is speaking to an urgency motion in the senate on "the actions of the Abbott government in undermining consumer protections by weakening the Future of Financial Advice laws".
The economy remains the more significant threat — and the risk to him from the debt debate is that it could contribute either directly or indirectly to the economic slump, whether by triggering a credit downgrade, undermining consumer and business confidence, or simply by taking money out of the economy, which could sap G.D.P. in future quarters.
High unemployment may delay any economic recovery, undermining consumer demand and impeding a recovery in the housing market.
There is concern about the long-term impact of the US's persistent low inflation, which risks undermining consumer spending as people delay purchases in the hope that prices will fall further.
Gramm and his wife Wendy, who was rewarded with a position on Enron's board of directors after her own stint in government undermining consumer protections, were the high priest and priestess of the religion of radical deregulation that captivated U.S. presidents from Ronald Reagan through Bill Clinton and on to George W. Bush.
