Question

In: Economics

With more natural disasters occurring, with rising political expectations that government will provide aid, and with...

With more natural disasters occurring, with rising political expectations that government will provide aid, and with the federal government shouldering more of the cost, are you comfortable with the implication that this could lead to a growing concentration of power in the federal government?

Solutions

Expert Solution

I don't think that growing natural disasters and political expectations alongwith more cost being shouldered by the federal govt will lead to more concentration of power in the hands of federal govt.

It is inevitable for the state to intervene in the national market by bearing the cost in situation of emergenicies. But , it is upto only the emergency period. After that the govt again withdraws itself from the market and let the free forces play in the market. Ultimately , the govt has to let lose the control because it too has scarcity of funds. For how much time you could expect the federal govt to bear the majority of costs. At last , it will have to shift the burden on the pvt players and the population itself. Also , natural disasters like COVID-19 happens once in a millenium . We cant say that there will be concentration of power in the hands of federal govt because other natural disasters do not consume such hefty amount of funds of the govt. Rising political expectations also forces the govt to take control in its hands and we can see that Economies like U.S have been following protectionist policies . This might move the power in the hands of federal govt but only for international trade matters and that too will have to be done away with after the objective is achieved. Concentration of power in the hands of federal govt is a rare situation in Capitalistic economies whereas Socialist Economies can lead to concentration of power in the hands of federal govt.


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