That is a very reasonable assessment, very accurate about how it plays out. My only quibble? I still give gov almost all the blame, because consumers, just like companies, are often just trying to survive the economic landscape our government has forced on us. And often consumers are companies - as business to business products and services are a huge part of the economy too.
And I agree with you that the government is the biggest factor in this problem. The government should be creating the conditions for the best economic growth, then stay out of the way.