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why waste money and capital on something when it can be more efficiently used elsewhere?

They can't make it more efficiently. They can make it cheaper.

There are two problems here. Pick a column:

Part of the problem is what we have done to ourselves with environmental regulations and labor regulations.

Foreign producers don't have the cost of our environmental restrictions and our labor protections. As a result, not only are they making things cheaper, but they are using more resources, creating more pollution and killing and injuring more workers in the process.

Don't misunderstand me. I think we have really gone beyond the point of reasonableness and into seriously diminishing returns with our restrictions and standards. However, the rest of the world is spewing polution, exploiting their young children, getting workers killed and injured, and generally doing things we prohibit and strongly punish here.

If it's wrong to pollute the air or poison a river in the U.S, it should be equally wrong to poison a river or pollute the air in China or India. If it's wrong to pay workers $0.05 per shirt piece work rates in the USA, it should be wrong to buy a shirt made with $0.05 per shirt piece work labor in the Dominican Republic.

In short, we need to tell the environmentalist that have put our manufacturers out of busines, "If it's bad for Americans to pollute, it's just as bad for Chinese and Indians to pollute, and you, the 'environmentalists' will have to pay the increased cost of goods produced in factories that meet your restrictions. We won't allow you to flout those regulations by buying goods made by polluters abroad." The only reason the useful idiots in the environmental movement push their crap is because they don't actually have to pay the price for it. Well, American workers should be fed up with paying the price of a clean environment close to home with their jobs when foreign workers can keep working and destroying the planet, or at least their part of it.

In short, access to our markets should be based on compliance with our standards. We should probably lower our standards to a more reasonable level. Once we have things at a reasonable level, only allow goods from sources that meet those reasonable standards. Bar those countries who are unreasonably exploiting their people and their environment from selling their goods in U.S. stores.

Also, it would help if US companies would realize that if they fire all the Americans and move all the jobs to India and China, they won't have any customers in the USA to buy their products any more. That's bad for business in the long run, even if you do save a few bucks in the short term.

The other part of the problem is the long term outlook for taxation, regulation and government costs (and possibly government stability if the situation gets really bad). While the meager tax cuts do provide some stimulus in the short term, the long term outlook is very bleak. Bush's attempt to make Republicans more socialist than the average DemocRAT has hurt this even more.

Businesses make long term investments in job creating assets like plants and equipment based on their long term view of the economy. Ours looks bad in the long term.

I think the Bush tax cuts still expire in 2010 (or is it 2011?). There's tax increases looming on the horizon for Medicare prescriptions (which will cost $ trillions), and for retiring baby boomers collecting Social Security.

Add to this the fact that Republicans are spending like drunken sailors on discretionary, welfare state social programs. I'm not talking about spending on homeland security and defense (which was a necessary expenditure). I'm talking about spending on the Department of Education (up 65%-70%), the Department of Labor (up 65-70%), on the farm bill ($100 billion) and on prescriptions for Medicare ($400 billion, honest ;) really).

In spite of what the Bushbots say about the deficit projections being unimportant, deficits do matter, especially in job creating long term investing. What's most important is the trend for the deficits. That trend appears to be ever increasing. There's every indication from the Republicans that if economic growth actually does increase revenues, the Republicans will spend those increased revenues on welfare state expansion, trying to outspend the Democrats to win reelection.

With that environment, the long term picture for interest rates is bad. The long term picture for taxes is bad. The long term picture for excessive regulation is bad. There's nothing good in the long term outlook to make people want to invest in job creation in the USA. Especially when they can outsource their production and now their operation, information technology and accounting jobs to less regulated, more pro-business environments abroad.

Two things are needed for this economy to really boom in the USA.

First, we need fair trade, not the totally open anarchist "free trade" that we have now.

Second, we need some signs of fiscal restraint from Washington DC. Preferrably from the Republicans.

Those two items would go a long way toward making the big boom that looks like it will happen "any time now" actually start happening in the USA. Otherwise, that boom is likely to happen (if it ever does) abroad, and we'll still have severe unemployment and a soft economy in the USA.

The tax cuts alone aren't going to lift this economy. We continue to lose American jobs every month. Somehow consumers are continuing to spend money, but that can't go on forever if the job losses continue. Also, there's a negative trend for consumers that almost everyone is ignoring. The increases in consumption over the last couple of years has been fueled significantly by people refinancing their mortgages and pulling cash out to spend on other goods. With interest rates now headed up, that source of consumer purchasing power has quickly stopped.