The economy appears to be reviving but there’s a big cloud to go with that silver lining.

Over the past six years, more businesses have closed than have started, according to the US Census Bureau. On average, 400,000 new businesses with one or more employees are born each year, but 470,000 die.

That minus 70,000 doesn’t bode well for the future. It’s been 35 years, writes Jim Clifton, since the American economy had such a decrease in entrepreneurship.

The picture doesn’t improve with a wide angle lens. Globally, the US ranks 12th in business start-up activity trailing several Scandinavian and Eastern Bloc countries. Even Italy, not exactly known for private or public sector efficiency, beat us out.

Entrepreneurship is a key driver of the US economy. Of the roughly 6 million businesses across the country, 4.8 million employ nine or fewer employees. Another million or so are medium sized businesses with fewer than 100 employees. Only about 19,000 American businesses employ 500 or more employees. Businesses start small and stay small or they grow. Unless, that is, they close.

What is causing business to close faster than other businesses are starting?

Could it be government barriers such as state licensure requirements that disproportionally affect new startups? Could be the tangled knot of federal regulations that cost Americans $1.8 trillion a year?

Diagnosis and treatment are needed. We can’t wait another year, and another loss of 400,000 businesses, to find out.

Find out more about solutions to creating jobs and getting our economy going again – and for real this time.

What are your thoughts? How do we encourage more startups, and have fewer businesses close? Share your thoughts on our Facebook page!

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