Encouraging growth

The CEOs certainly have the wherewithal to do more. Balance sheets are very healthy, especially compared with those of governments and households. In the four largest economies, government debt-to-GDP is moving past 110%, while corporate debt is below 80%. The U.S. government is running a budget deficit of around 8% of GDP, while the corporate sector is running a financial surplus of 2.4% of GDP -- $374 billion annually -- above prior peaks seen in the early 1990s and early 2000s.

Investors are throwing cash into every corner office willing to take it, given the rush into corporate bonds that's currently under way.

Last month, companies sold $75 billion in corporate bonds, the busiest July on record. For 2012 overall, corporate debt issuance is on track to hit $1 trillion, according to Thomson Reuters. It's no wonder: Those bonds carry an average yield of around 3.2%, and safe-haven investors are seeking alternatives to the negative real yields on Treasury bonds. Over the past 30 years, corporate bond yields have averaged 7.2%, as the chart below shows -- but 3.2% is good in today's markets.

Image: Moody's Corporate AAA Bond yield © MSN Money

Getting them in the game

So CEOs have the need and the to spend and invest, but the motivation is missing. That's where government, encouraged by the voters, can help.

Thanks to years of stagnant wages, higher fuel costs and favorable demographics compared with China, as well as rising wages and inflationary pressures overseas, America is enjoying a resurgence in manufacturing competitiveness. A study by the Boston Consulting Group (.pdf file) earlier this year found that seven industries are "nearing the point at which rising costs in China could prompt companies to shift the manufacture of many goods consumed in the U.S. back to the U.S."

This shift could create, according to the BCG team, 2 million to 3 million jobs and add $100 billion to the U.S. economy. Areas include furniture, computers, electronics, appliances, machinery and fabricated metals. Just look at Google's (GOOG) decision to make its new Nexus Q media device near its headquarters in California.

But in order to encourage CEOs to make this happen -- to invest in and start building things like fans, vacuum cleaners, microwaves, freezers and dishwashers here at home -- government needs to help tip the cost balance in our favor and away from China and other export-oriented Asian economies. And it needs to do it now.

We need to focus on the strategies used throughout the South to attract foreign auto manufacturers, including tax incentives; community college training programs; highway, rail and utility connections; and site preparations. We need to simplify and lower the corporate tax rate. We need to streamline employment processes. And above all, we need to resolve potential watershed events like the fiscal cliff.

This may sound like more corporate handouts, and you may not like the idea of giving additional incentives to wealthy CEOs. I sure don't.

But we've made a choice as a society to have a dynamic, open-market economy with porous borders through which goods and capital can flow to our trading partners -- other countries. Given that context, this is what must be done. Our governments -- national, state and local -- must compete for jobs, just as states compete now.

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Otherwise, the CEOs will take their money, their factories and their jobs somewhere else -- Mexico, for example. That's where the BCG team believes some of the jobs coming back from China could end up if we're not careful.

At the time of publication, Anthony Mirhaydari did not own or control shares of any company mentioned in this column.

Be sure to check out Anthony's new money management service, Mirhaydari Capital Management, and his investment newsletter, the Edge. A free, two-week trial subscription to the newsletter has been extended to MSN Money readers. Click here to sign up. Mirhaydari can be contacted at anthony@edgeletter.com and followed on Twitter at @EdgeLetter. You can view his current stock picks here. Feel free to comment below.