Roles of the US Government in the US Economy

1146 Words3 Pages
bulb-icon

Recommended: What role does the US government play in our economy

How the US Government plays a role in our US Economy Fiscal responsibility is an important part of stability and the government must focus on maintaining the economic stability. As we all know, Government dept can quickly become a burden on the economy and weaken it. Macroeconomic policies change credibility of the government and strengthen political institutions. It is very important that our economy has credibility and stability because it’s vital to us Americans long term investment decisions that allow the US economy to grow. Government provide stability by ensuring to maintain stability of currency, enforce-defend property rights, and provide oversight that assures private citizens that their transaction partners in marketplaces are accountable. Allowing market participants to begin putting their resources back to work in areas they’d be most beneficial. President Obama’s fiscal responsibility summit last February indicated that he understood the urgent need for fiscal discipline. Congress’s enactment of the American Recovery and Reinvestment Act and President’s proposed budget makes the goals of a sustainable budget and addressing nations longer term fiscal priorities, such as entitlement liabilities, even more elusive. The administrations recently released midsession reviews from the office of management and budget that over the next 10 years the accumulated deficits will total $9 trillion which means that the debt held by public will be a staggering 77% of GDP in 2019. If the debt level continues to grow faster than our economy, the US will owe more than it makes. Government spending and deficits automatically increase during economic downturns due to more demand on social safety net provisions and falling tax revenue... ... middle of paper ... ...rty was ignored in the social aspect of economics. Government intervention was and is still necessary to remedy the inequities that evolved from economic liberalism. Antitrust laws were deemed to prevent undermining competition of monopolies and cartels, labor laws to protect rights of workers; public utility regulations to prevent consumer exploitation, food drug laws were designed to protect health of the people, antipollution measures to preserve our environment, safety regulations enforced to protect workers from injury and socioeconomic legislation to promote the common good. The amount of government regulation, restriction, and intervention in the economy is substantial. No free markets, and rapid innovations in technology and communications, the need for government intervention in the economy is necessary to correct abuses or to promote general welfare.

Show More
Related

  • Progressive Reform Movement in Arkansas from 1900-1920

    870 Words  | 2 Pages

    There was a strong need for government intervention. Action from the government was needed to solve major problems such as: big business, low wages, bad working conditions, and the need for more schools. Many progressives believed this was the responsibility of the state government.

    Read More

  • Contrasting Friedman and Lindblom on Economic Systems

    1124 Words  | 3 Pages

    “the exercise of that authority is curbed and shaped by the concern of government officials for its possible adverse effects of business, since adverse effects can cause unemployment and other consequences that government officials are unwilling to accept. In other areas of public policy, the authority of government is again curbed and shaped by concern for possible adverse effects of business” (Lindblom page 178).

    Read More

  • The National Debt

    1565 Words  | 4 Pages

    Every day in New York City, hundreds of people walk past a huge digital billboard with giant numbers across its face. Each person who walks past this billboard sees a slightly different arrangement of numbers, growing larger every second. This board is the National Debt Clock, representing the over 14 trillion dollars currently owed by the United States. While some people claim that the national debt is caused by the falling economy, most maintain that the debt itself causes the poor economy (Budget Deficits 2007). Rising debt leads to higher interest and investment rates, and cuts into our national savings. Ignoring the national debt leaves the major burden of paying it off to later generations, while meanwhile allowing our country’s economy to further drop and our dependency on other nations to rise.

    Read More

  • Exploring Milton Friedman's Corporate Social Responsibility Theory

    1064 Words  | 3 Pages

    For instance, if the government’s power is dispersed and its involvement in the market is limited, then more freedom is exercised, thus, allowing for the preservation of a free society. Nonetheless, despite Friedman’s belief, today’s government intervenes in the fields of licensing and supplying of social services, as well as, certain monetary matters. Therefore, the government of the 21st century has advanced and become more involved in the market than previous generations. Not to mention, that it has acquired more power and control over the

    Read More

  • The U.S Budget Deficit

    1510 Words  | 4 Pages

    The U.S budget deficit over the years has been a problem but lately the deficit has shrunk. However, what made the U.S budget deficit get to where it is today and what will it be like in the years to come. Throughout the past the U.S has operated under a deficit. This means that the U.S Spent more money than it was taking in. The cause of the excess in spending was different depending on which year. Some of the causes were war, increase in spending , and economic downturns. There were different acts passed to try and control the deficit problem. The deficit at the present time is declining. This decline is due to the improving economy, sequester, and a tax increase on high-income households. The big factor that went into the decline in the deficit for 2013 was the payment that Fannie Mae and Freddie Mac made. The deficit decline in the present time may make some think the U.S could get out of debt but it has been projected that the U.S deficit will start to increase once again.

    Read More

  • Reducing the National Deficit

    1061 Words  | 3 Pages

    Many United States' citizens are unaware of the country's current financial state. Many assume that one of the world's wealthiest countries could never be in debt. This is untrue however, and, in fact, the country with the greatest income per capita is in major debt. This study will examine possible solutions to reducing the United States' national budget deficit.

    Read More

  • Google Case Study

    734 Words  | 2 Pages

    There have been various types of legislation and regulations passed by the government in order to ensure that harmful monopolies are not created in our society. Three of these important regulations and policies include economic regulation, social regulation, and the antitrust policy. Economic regulation is defined as a “type of government regulation that sets prices or conditions on entry of firms into an industry”. Examples of agencies that are economically regulated include the Federal Communications Commission, the Federal Reserve System, and the Security and Exchange Commission. Social regulations are government-imposed restrictions that are used to discourage or prohibit harmful corporate behavior and are intended to protect the health

    Read More

  • Laissez-fair Economics

    430 Words  | 1 Pages

    Although the belief in individual rights and responsibilities is important there must be some kind of government intervention. The government helps regulate bad companies selling third rate products and helps protect the consumer from buying these products. The government also intervenes if a company has an unfair monopoly over the entire market to help promote smaller businesses to enter the market and have a chance to produce revenue. We also know that if there is total government control the wealth of the individual suffers. Some of the poorest countries in the world rely on a Socialist government and lack economic growth and wealth.

    Read More

  • Laissez Faire

    1822 Words  | 4 Pages

    I think government should have a limited role in the economy, it should regulate it just enough to keep it stable. In laissez faire big business is basically allowed to do whatever it wants, short of murder without any legal ramifications. If big businesses are allowed to grow unrestrained they will most likely do so until monopolies are the only form of business left. If this happens there is nothing to stop these monopolies from taking advantage of the consumers who in the end would end up having no choice but to s...

    Read More

  • The Current State of the U.S. Economy

    620 Words  | 2 Pages

    The United States economy is racing ahead at dangerous speeds, and it may be too late to prevent the return of widespread inflation. Ideally the economy should move ahead gradually and grow at a steady manageable rate. Mae West once stated “Too much of a good thing can be wonderful” and it seems the U.S. Treasury Secretary agrees. The Secretary announced that due to our increasing surplus and booming economy, instead of having an outsized tax cut, we should use the surplus to further pay down the national debt. A tax cut, though most Americans would favor it initially, would prove counter productive. Cutting taxes would over stimulate an already raging economy, and enhance the possibilities of an increase in the rate of inflation. Paying off the national debt would actually help lower interest rates and boost investments, and therefore further increase the wealth of the population, while keeping inflation at bay.

    Read More

  • Federal Budget

    1134 Words  | 3 Pages

    The federal budget is known as the notorious economic tank from which money is distributed to various programs. The money used every fiscal year, which begins October 1st and ends September 30th the next year, belongs to the people. The government raises this money through taxes and they spend it on national defense, Medicare, and social security. The federal budget is an exercise in making choices, and those options will certainly affect individuals living in the U.S. These choices cause debt to pile up on the government, who is struggling to make it disappear. The deficit and debt of a government gauges how well it is being run and how well it has been run in the past. According to The Economist the national debt is the total outstanding borrowing of a country’s government; it is an accumulation of deficits that has yet to be paid off (Economist, A-Z). The current U.S. federal deficit, as of the 2013 fiscal year, is a monumental $680 billion dollars, adding to an even higher debt. Any attempt to diminish this debt has the consumer footing the bill, but there has to be a different way. There have been requests to increase taxes, to raise revenues for transportation infrastructure, to restrategize the military force or to make defense more affordable (“15 Ways to Rethink the Federal Budget”, Brookings).

    Read More

  • Environmental Economics and Government Policy

    3398 Words  | 7 Pages

    Economists often talk about letting the economy work through the mechanism of the free market versus government control and regulation. Some believe that if the market is allowed to "do its thing" unprohibited and without government interference, then resources will be allocated efficiently, equilibrium will be found, and so on… However, this is not always possible. Of course, government control is not perfect either. Thus, it would seem that at times the market may be more appropriate than the government; other times the government may be needed because the market is not able to function properly; and other times a combination of the two working in unison may provide the best and most effective and efficient answers.

    Read More

  • What is the Multiplier Effect?

    1296 Words  | 3 Pages

    In time of economic crisis the government has a choice to cut spending or increase spending for public goods and services. “In 2009, Congress passed the American Recovery and Rein- vestment Act, which authorized $787 billion in spending to promote job growth and bolster economic activity”(Stratmann/Okolski 3). John Maynard Keynes, an economist of 20th century, suggest that the government should run a deficit if it will create jobs and increase capital gain. This theory support the current stimulus package that has been introduce during President Obama’s term. Although the flaw with this concept is that it makes the assumption the government has done studies and understands which areas needs the funding the most and knows where it will be beneficial, realistically that is not true. “Federal spending is less likely to stimulate growth when it cannot accurately target the projects where it will be most productive” (Stratmann/Okolski 2). This can be seen because political figures will spend money where it directly supports their needs as well. For instance, the political figure would rather spend money to things that will yield a p...

    Read More

  • The Role of the Government in the Economy

    848 Words  | 2 Pages

    The appropriate role of government in the economy consists of six major functions of interventions in the markets economy. Governments provide the legal and social framework, maintain competition, provide public goods and services, national defense, income and social welfare, correct for externalities, and stabilize the economy. The government also provides polices that help support the functioning of markets and policies to correct situations when the market fails. As well as, guiding the overall pace of economic activity, attempting to maintain steady growth, high levels of employment, and price stability. By applying the fiscal policy which adjusts spending and tax rates or monetary policy which manage the money supply and control the use of credit, it can slow down or speed up the economy's rate of growth in the process, affecting the level of prices and employment to increase or decrease.

    Read More

  • Are Politicians the Job Creators?

    635 Words  | 2 Pages

    Simply put, the solution to unleash the full potential of America’s free enterprise system is for the government to stay out of the free market. Government should not be passing legislation just to make people feel safer, but rather decrease the multitude of regulations drowning our economic capability. Politicians should also simplify our tax code and make filing tax returns actually understandable for someone without an accounting degree. By far, the best thing for government to do is to leave the task of keeping our free markets alive, strong, and unmatched in the world to We the People.

    Read More

More about Roles of the US Government in the US Economy

Open Document