Net of inventory adjustments, the economy's demand for goods and

Net of inventory adjustments, the economy's demand for goods and services is growing at only about 1% a year. The real potential is about 5%, but with economic policies so ill-conceived and with a president so ambivalent about private enterprises - other than those run by Wall Street barons, Hollywood producers and union bosses - that simply is not possible.

In the second quarter, consumer spending, investment in new structures, equipment and software, and government purchases added 4.4% to demand - but as imports grew much more rapidly than exports, the trade deficit tapped off 3.4%. The difference, 1% , is annual growth in demand for US-made goods and services. That has been the pace since the recovery began in July 2009.

Businesses can accommodate up to 2% growth in demand just by improving productivity and not adding workers. Unless the rapid growth in imports can be curbed, the US economy is headed for very slow growth and rising unemployment.