It is my opinion that the main things needed to get the American economy moving forward include 1) the formation of new businesses, 2) various forms of innovation, and 3) favorable conditions for established businesses to thrive.
New business formation requires courage and an appetite for risk. However, I think what many during the past 15 years have called "risk" is actually gambling.
Risk means that a well thought out business plan exists along with an assessment of the probability of outcomes based on appropriate analysis and practical experience. This is a different approach when compared to pure gambling where probabilities of outcomes are unknown or ignored completely. Many businesses during the .com boom were nothing more than a gamble with investors' money. Likewise, loose credit conditions and ultra low interest rates between 2001 - 2006 led to investment banks engaging in gambles in the derivatives market and bankers making inappropriate loans for homes.
Perhaps the greatest abuse of risk was the disaster in New Orleans when Hurricane Katrina pummeled the levies with a significant storm surge. The risk of such an event was known or many years, yet political leaders ignored its potential consequences and under invested in critical infrastructure. I think this single event symbolized the attitude of the time.
The outcome of the abuse of risk during the past 15 years is the untold loss of billions of Dollars and a sharp reduction in the amount of venture capital available for business formation.
This situation needs to change for the US economy to grow to its full capability.
Innovation is another important component for economic vitality. It comes from necessity and an intense commitment to create something new and useful. Somehow, America must maintain and expand its innovative capabilities. I believe that this comes from personal commitment and not from specialized programs to spur innovation.
Finally, existing businesses must have a favorable operating environment in terms of regulation and taxes. Certainly there are many opportunities in this area.
Successful policy change in these three areas will help business to undergo repair, building a base for expansion. A big part of this repair will involve expanding export markets since the health of the US consumer remains a concern. I very much doubt there will be much of an rise in consumer spending during the next several years.
However, hanging over the US is a rapidly expanding government budget deficit, affecting state, local, and federal government operations. It is the pull of the deficit that will inhibit many aspects of a return to economic growth.
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