Question

Discuss your personal philosophy concerning the Role of Government in our society. DO you believe in government intervention in the economy or should it be more "hand off - Laissez Faire?"

Answer 1

Governments are responsible for providing infrastructure that people, such as military defence, fire and police forces, highways, healthcare, social care, and environmental protection, can not adequately provide for themselves. Some government agencies also provide public services such as heating, disposal of sewage, or electricity. Governments collect taxes and fees and charge for many of the programs they offer to the public to raise the money required to provide programs. When those taxes are not enough to finance desired services, governments may borrow money.

U.S. policy entities borrow money because they are confident that the IOUs they have published would cover potential revenues. This optimism is partially focused on the ability that governments have to tax their people and regulate the quality of government services that are offered. While tax increases and service cuts may be introduced to raise funds, these acts have both political and economic implications. Politicians who wish to stay in office are hesitant to see their constituents displeased. In fact, the more people pay in taxes, the less money they'll have to spend in the markets or invest in private enterprise, harming the economy as a whole.

The degree to which government should interfere in the economy is one of the key problems of economics. Free market economists claim that government interference should be strictly limited, because government involvement appears to contribute to wasteful resource allocation. Others contend, however, that there is strong case for government interference in various areas, such as externalities, public goods and monopoly control.

In a free market, employment, capital, and resources continue to be unequal. Private charity appears to be fragmentary. Intervention by government is required to redistribute income within society.

Fairness. Inequality may be generated in a free market, not through expertise and manual labor, but by privilege and monopoly control. Absent government interference, corporations may use monopoly power to pay employees low wages and charge customers high prices. Without government action, we are liable to see monopoly power expand. Intervention by the government will control the monopolies and encourage competition. Policy action will also encourage greater income equality which is considered to be fairer.

The point is also made that people should be able to maintain the benefits of their hard work. But, is this justified if wealth and income and opportunity rely on being born into the right family? A wealth tax can reduce the richest's income, and this money can be used to spend on education for those born in poor circumstances.

Goods such as education and health care are not simply public goods (though sometimes considered public goods). Provision in a free market appears to be patchy and unrivaled. Universal government education means that everybody will, in principle, receive an education which has a strong social value.