What does it take to recover?

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If you don’t know the answer to the question, how are you going to recover? That is the question, how are we going to right the economy?

First, it takes capital in the hands of the private sector who know how to produce products that consumers need throughout the world. Products produced by Americans have to be the best quality at the best value. Those are the initial criteria for success.

Can government do something to make capital available for investment? You bet. What is the Obama administration doing to accomplish this?

One of the constraints is that the USA is in such debt that capital is not available to the private sector. Part of the answer to this problem is to reduce government spending.

If you reduce the size of the government bureaucracy that necessarily means reducing the work force and that adds to unemployment. Increasing the number of available workers, should necessarily drive down the cost of labor because people will work for less. That is competition.

Cutting the expense of war will reduce revenues among defense contractors. Defense contractors that do nothing but government business are essentially on welfare. That means, their future viability is when they produce products that the world needs and that are superior in quality and best value.

So, you see the cycle and the situation. Systematically reduce the size of government while directing capital to the commercial market. Provide tax incentives for new product and new business development. Get out of the way of entrepreneurs and watch America return to success.

I like this response so much, I am moving it into the story. From canwehavesoemdepthplease: "This is the common mantra albeit a little superficial. US banks actually have higher capitalization rates now than their foreign counterparts, though they are amassing cash and not lending. This has to do more with a blunt macro fiscal policy set and a reaction to populist anger at debt levels. From those on the inside, unemplyment would have been in the range of 25-32% without the bailouts. GE almost folded and MacDonalds papers were almost pulled by BofA meaning a failure of theirs to meet payroll. That is why the stimulus money had to be applied. You can't explain the actual mechanics of this in a populist culture where sound bite passes for analysis, this is why the US uniquely produces phenomena such as Beck, Palin and the Tea Party. Dumb media produces dumb populace. The US also needs to drop the seal the border mentality - Arizona ironically by 2015 will need to start attracting more immigrants to service its aging population. 40% of 2nd generation immigrants create businesses that actually create jobs. Stagnation for the US economy will be its collapse. Immigrants (esp illegals) do not bring aged parents with them so their actual footprint on social services is lower than legal immigrants quite often, yet they spend which stimulates t he 80% of the economy that is consumption driven. We need to create and encourage smart businesses and technologies that have export potential to the emerging global middle classes and that meet infrastructure challenges for fast growth nations. Thinking we can close the borders and build widgets is simplistic Plain-esque type rhetoric - I could go on...I won't better back to the regular programming of accusation, birthers and xenophobia.American exceptionalism is rapidly degenerating and it is in part due to poor education, a failed electoral process, corporate politics, reduced analytic capabilities and the media. Good luck to all on board!"