Britain’s new economic strategy is sound: cut the wealth-consuming public sector and expand the wealth-producing private sector.

This is no more than simple common sense. Yet the UK’s public sector has been expanding for years while the private sector has not been growing as it ought. The laws of mathematics tell us that the inevitable consequence of increased expenditure and insufficient income is debt. It is a shame that it took a recession to force Britain to face that reality and try, at last, to reverse both trends.

The problem is that, in adopting this laudable strategic objective, Britain’s new Coalition government has no idea how to achieve it.

Here is how to do it. Do not try. Just let business get on with it. If the politicians and bureaucrats would leave us alone – and by that we mean take away all their meddling, interfering regulations, rules and compliance burdens – the private sector would not only achieve their objective of taking up the slack of the reduced public sector but would go on to expand far more than their narrow little minds could ever imagine. History proves this.

However, the politicians do not really have faith in this. Unless they are prepared to act on their words, business will not be able to take up the slack. The strategy will then be perceived to be failing, then blamed, then abandoned – without really having been tried.

If they rely on business, they must trust it. They must take us seriously when we say that legislative interference like the “Equality Act” in the UK, the maternity proposals of the EU, and the poorly drafted healthcare reforms in the USA, will prevent us from completing the tasks they have assigned us, to generate income and employment.

They must also understand that no government schemes or spending programmes designed to “help” business can make up for that interference. For President Obama to tout a “Small Business Bill” after approving the pork barrel of the stimulus package and federal healthcare is like shooting a man in the guts and then offering him a Band Aid.

Similarly, the language of the new British government is suspiciously reminiscent of its unlamented predecessor, which thought a few handouts to selected businesses – its friends – could compensate for increased tax and regulation that drove businesses and jobs abroad.

Message from Business to Government: Yes, we can take up your slack for you – but only so long as you do not try to “help” us – just get out of our way.

America’s recovery is slow, but there are signs of improvement, at least in some states and some sectors, for those prepared to look for them.

The problem for US politicians is that most voters are not inclined to look. They judge economic progress by the crude measure of “jobs”, and economic growth does not necessarily mean an increase in employment. On the contrary, it might mean that companies are finding more efficient ways of operating.

Some say the policies of the Federal government actually discourage growing businesses from taking on new people.

Since this blog is strictly non-partisan, and since the government’s record on employment will probably be the decisive issue in November’s mid-term elections, it is not for us to take sides.

However, it would be interesting if we could construct an experiment which enabled us to compare different approaches to the economy. For that experiment to be fair, the different approaches would have to be applied to identical situations.

That is impossible in the real world, but it is possible to compare different approaches in places where there are several common factors.

California and Texas are both big states with ethnically diverse populations. Both border Mexico and rely on immigrant labour. Both have significant agricultural and technology sectors. Both have known the extremes of prosperity and poverty in the past. Both have Governors of the same political party.

Yet it is generally accepted that Texas is coming out of recession far more strongly than California.

Perhaps one should not read too much into this. After all, the economic strength of a state varies according to how one defines “wealth”, and most definitions produce patterns that defy neat explanation. For example, several states with “left wing” reputations have a higher percentage of millionaires than most.

So it is unwise to generalise – except to say that it is clear that local variations do matter, and that different policies do produce different results. If this is true within countries, it is true between countries. US politicians should not assume that a return to economic growth will mean a return to high employment. Job generation requires effort – or at least a friendlier attitude from government towards those who might be willing to make that effort.