How government is killing American entrepreneurship

America is plagued by mediocre primary schools, subpar infrastructure, and dysfunctional government. But somehow, this country manages to get at least one big, important thing right: innovation.

That's the deep magic of the world's leading economy. But some disturbing trends suggest the nation's competitive edge may vanish if government doesn't embrace startup capitalism rather than crony capitalism.

A new Brookings study finds bad news, both short- and long-term, for U.S. entrepreneurship, a critical driver of innovation. From 2009 through 2011, the deaths of existing businesses outnumbered the births of new ones. Of course, at least some of that trend can be pinned on the Great Recession and Not-So-Great Recovery.