Re: The US national government's role in the economy

In the current economic recession, it is easy to judge and critique the actions and measures the federal government has taken to deal with the situation. It is also easy to blame the government for getting us stuck in this predicament in the first place. I am not saying that the federal government has been absolutely perfect in handling the economic situation, but for the most part, there is little more and little less that the government could have done to make things better than they are now.

In the blog post, "The US national government's role in the economy," the author discusses the government's part in dragging the nation deeper and deeper into debt. The author writes:

"It is understandable for our government to use billions of dollars to stimulate the economy in a crucial time of recession. However, our Framers did not intend for the government to establish such broad and powerful institutions involve in the economy. Therefore, there is nothing much in our constitution in restricting the actions that Legislature can involve in the free market."

My only argument here is that just because the Constitution does not explicitly detail extensive information on fiscal regulation does not mean that it is not beneficial for the government to take such actions. In fact, there are many benefits the government provides, such as financial aid for education, that are not stated in the Constitution. Yet, we will not refuse financial aid even if we refuse government bailouts. The author goes on to write:

"I am unsure of how much role the government should has in regulating the economy, however, I strongly believe that there should be a deficit limitation and our government should not easily bailout bankrupt companies just because they are two big to fell. Unless the government had the proper regulations in making sure such companies will not create another recession, it should leave the economy itself punish such irresponsible actions."

I agree that the deficit should be managed wisely; however, the bailouts played an integral part in preventing our economy from declining any further. The positive impact these large companies have on our economy fares far beyond face-value.

The author does, however, make an insightful final statement that I agree with:

"I think that even thought the government should not assume a broad role in the economy, it should regulate and promote the welfare and social insurance for the public in general. I believe with deliberations and proper cautions, we can prevent most recession and stimulate the economy without ineffectively involve deeply in the economy or having greater deficits."

Though, I do not completely oppose the federal government's involvement in our nation's fiscal matters, I do think there should be a limit in their spending. I think this limit should be derived from careful management of funds and more in-depth analyses of any course of action the government plans on taking. See my recent post, "Health costs --no quick fix."