If you want to save the world, support entrepreneurs. They will figure things out. In April 2007, a group of people started Hyde Park Angels. Groups like this have become de rigeur all across the US. They started in Silicon Valley. Two of the most successful angel groups of all time are Band of Angels and Boston’s Common Angels. There are plenty of angel groups throughout the United States, and I don’t mean to slight anyone. They all have roughly the same goal, make very risky seed stage investments, support the companies they invest in, and hope they get a nice return on that investment.
Over the years, some entrepreneurs have skipped joining angel groups and become super angels. Brad Feld, Ron Conway and others are guys that take a shot with their own money outside of angel groups. Sometimes they also run a fund, and sometimes they don’t. There are no rules.
Many Americans are extremely worried about the future of America, American jobs, American education, and American society in general. I think that is one of the reasons for the very high disapproval ratings for Congress, and the President.
While there really aren’t any hard and fast rules for entrepreneurs, there are some best practices. There also is one cardinal rule when running a company. Stay out of crushing debt. Don’t take on more debt than you can afford. If possible, don’t take on debt at all. Huge amounts of debt become a daily expense that smother the hopes and dreams of the company. Unmanageable debt loads cause the executives to make emotional, rash decisions that cause the company irreparable harm. So, cardinal rule number one is don’t take on too much debt.
Running a country isn’t that much different.
There have been many graphs out there to illustrate America’s debt. It is indeed a crisis because there are only a few ways to stop it.
Here is the debt to GDP ratio
Or simply the size of the debt. Accelerated in the past few years.
You get the gist.
Let’s just say that both political parties share some blame in creating this mess. Obama clearly has made it appreciably worse. Now the question is, how do we get out of it?
One word answer: Entrepreneurs.
Charles Schwab in today’s Wall Street Journal.
But doing so will require a consistent voice about confidence in businesses—small, large and in between. We cannot spend our way out of this. We cannot tax our way out of this. We cannot artificially stimulate our way out of this. We cannot regulate our way out of this. Shaming the successful or redistributing income won’t get us out of this. We cannot fund our government coffers by following the “Buffett Rule,” i.e., raising taxes on Americans earning more than $1 million a year.
What we can do—and absolutely must—is knock down all hurdles that create disincentives for investment in business.
Additionally, pester your local politicians and get them to change rules, regulations, eliminate taxes and end fees that get in the way of people starting simple lifestyle businesses. Once a person generates some capital, it invigorates their mind and they start looking for other businesses to start.
At the same time, the pols need to slash, and I mean slash massively, government spending. There are four basic ways to do that.
1. Privatize services that can be turned over the private sector, including the USPS.
3. Eliminate sectors of the government and free those workers up to create or find jobs in the private sector.
4. Reform entitlements.
Angel groups are at the ready to provide capital. Entrepreneurs will create businesses that create millions of jobs if we just get out of the way and let them.
Changing policy and programs will change the economics. Government spending will go down, and production will go up. America is so innovative, that we will make up the gap in our lifetimes. The road map to change is simple. All we have to do is have the will to do it. Otherwise, debt will overwhelm us and we will be doomed.