Yesterday I raised the issue of the dysfunctional political situation in the US which is preventing the US President from introducing a public works program aimed at boosting the degenerating public infrastructure. The fact that such a policy could generate millions of jobs and improve the long-term productive capacity of the nation is unquestioned. It was suggested that the US President might offer the conservatives widespread deregulation which would cut wages as a compromise. This would be pandering to their erroneous claims that that supply-side factors are restraining the capacity of American businesses to create work. Today we examine some recent research evidence that demonstrates how far amiss the current policy debate is. The evidence shows that firms are constrained by lack of spending at present and that the private sector is in a vicious cycle of spending paralysis. It suggests that the only way ahead is for the government to increase aggregate demand (via fiscal policy) but that the ideological obsession of the elected politicians is blocking the only growth option currently available. We are in a state where our politicians are deliberately stopping the economy from growing.