What’s going on with the economy?

Why can’t we get this recession past us?

The answer is simple if you know the basics:

* We are an economy that is 70 percent driven by consumer spending.
* To get the economy going again, spending must increase.
* But Americans are reluctant to spend.
* And banks are reluctant to lend.
* And even if banks did lend and people did spend, it would just get us all deeper into debt.

Is there any way out of this?

Yes, and it’s very simple. We can’t spend our way out of indebtedness. We can only work our way out.

You won’t hear this from our politicians. And you won’t hear it from media pundits either. It is politically incorrect to suggest that people have to work harder.

“We already work hard,” they say. “You can’t ask us to do more.”

But doing more work is the only way out. We have to work harder and make more money. And then we have to save some of that money and spend some too.

I made this point in Automatic Wealth. I said that most wealth-building books are flawed because they never say the truest thing: that the only way to get rich is to save a lot of money, and the only way to save a lot of money is to make more — much more than you are making now.

If our politicians really wanted to fix the economy, they would do everything they could to increase entrepreneurship in the U.S. Entrepreneurship, more than anything else, is responsible for the creation of jobs and wealth.

Billionaire entrepreneur Mark Cuban says that the most patriotic thing you can do is start a business in America and become extremely rich. I agree. Starting a business is the best way to boost your income, increase your savings, accelerate your spending, and help America work its way out of this recession.

Source: ETR