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EDWARD R. MULLER & LARRY ZIMPLEMAN: An Entrepreneurial Fix for the U.S. Economy – WSJ.com

August 29, 2011

An Entrepreneurial Fix for the U.S. Economy

Several reforms can make it faster and easier for new business startups.

OPINION AUGUST 29, 2011

By EDWARD R. MULLER

AND LARRY ZIMPLEMAN

Virtually everyone knows the U.S. and global economies are in serious trouble. We’re in uncharted territory. Having tried conventional macroenonic tools, we are now out of ways to stimulate growth in private-sector demand, which is flat and shows no signs of picking up any time soon.

The recent political dysfunction over lifting the debt ceiling offers little to no hope that any deals on short-term stimulus or fundamental changes in our tax code and entitlement programs can be quickly enacted.

The Fed may try a third round of quantitative easing. But with consumers and business scared by the outlook and the sickening decline in stock prices, any QE3 is likely to be pushing on the proverbial string.

Europe is lurching from rescue to rescue, trying to avoid the inevitable—a restructuring of the sovereign debt of several of its members, coupled with a government rescue of troubled European banks.

The emerging market economies that were rapidly growing have run into a wall, needing to fight inflation before it gets out of control. As this happens, the one bright spot in the world economy will dim.

It is tempting to sit back and accept the verdict of some economists who rightly point out that a massive deleveraging is inevitable, will take time and be painful. But policy makers have a responsibility to help limit the pain and help lay the groundwork for renewal.

While our two companies run very differently, we have come together to support what we believe is the only set of ideas that stand a chance of turning things around—ideas that can pass political muster in an otherwise very deeply divided Congress. These ideas center on reinvigorating what up to recently has been the most reliable source of job growth and innovation in our economy—the formation of new firms.

via Edward R. Muller and Larry Zimpleman: An Entrepreneurial Fix for the U.S. Economy – WSJ.com.

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