De-leverage before Economic Growth

From everything I see, the U.S. Economy will need to De-Leverage before the U.S. Economy can grow. 

It's should be no surprise that in the period of 1990 to 2008 we grew the economy on the back of "debt" - Commercial Debt and Personal Debt.

It should also be no surprise that economies grow on the back of demand and spending. In the U.S., the supply exceeds supply in most hard goods, commodities and raw material. No demand there.  How about spending? Spending levels are down for several reasons. First there is limited credit capacity with citizens. They are over leveraged now. Second, business levels are down, companies are over leveraged, so no demand there.

U.S. Government Debt aside, the grind of recovery is going to be two fold:

One, to slowly reduce outstanding debt owned by consumers so they can start purchasing again. (It would be cheaper for the Government to ease the ability of consumers to lower their unsecured debt levels through a buy down than send money to wall street to prop up banks, credit makers and market makers.) 

Second, companies will need to either look beyond our borders for sales or will need to find new demand sectors to profit their way out of the leverage they have now to take on new debt. Taking on new managed debt is growth. 

Nothing in this model looks like it is going to be a fast recovery regardless of what the BEA just said about the Recession being over. Time to be creative. Time to think outside the box. Time to look for opportunity outside our borders. Time to get off the couch and stop Government wasteful bailouts and deficit spending.

How's Obama's program of Hope and Change working for you? 

I thought so.