I don't think anyone can say with certainty what "causes" confidence, to what degree, or even what degree of confidence is "healthy" for an economy.  I would say it is safer to say that like most things in economics, the answers to those questions change by the minute and the mile — it is definitely different everywhere, changes over time, and varies when comparing small discrete parts of the economy versus the economy as a whole.

What I do think we can say is this:  while government may or may not be able to enact policies or rhetoric that induce confidence, and may or may not be able even to ascertain just how much confidence is the "right amount", the more government stops intruding on the lives of individuals and the economy, the more liberty we'll all have to pursue our own best interests.

The government should worry more about making sure that one's "pursuit of happiness" doesn't impede or infringe upon another's, and less about what outcome is reached.  We might not be more confident, but we'll certainly be more free.