Although the decline in Europe’s level of private investment from 2007 to 2011 is rarely highlighted as a feature of the region’s financial crisis, it was unprecedented. In fact, during that period, private investment in the European Union’s 27 member states (the EU-27) plunged by a combined total of €354 billion....Private investment is necessary for long term economic growth, employment growth, productivity and wage growth. The lack of private investment in the US is also responsible for the current slow economic growth in the US.
Source: McKinsey & Co
High tax rates along with legal uncertainties for investors, such as created by the Chrysler and GM bankruptcies, deter private investment.