The role of government in society

¶ … Government

Even if our country is experiencing are various political issues such as terrorism, drugs, or poverty; the country is facing the biggest issue at the moment which is the current situation of the economy.

The role of government in the United States and other western democracies has expanded dramatically over the last century. Compared to its pre-twentieth century functions, government has taken on new and vast roles, including old-age pensions, government-provided health care, and a host of other programs that typically comprise a modern welfare state.

Singerman (2008) said that many Americans have the same opinion on a person's right to private property; the government's right to distribute currency, levy taxes, as well as have a loan of money; and the rights of businesses as well as consumers to go into pacts and to determine their disparities by way of legal channels.

People in principle are able in partaking in a capitalist system where they own as well as acquire private estate and play a part in a free economy and our government plays a big part in the system by influencing the quantity of money which can be placed into the system -- taxes, inflation, interest rates are all affected by the actions made by the government, which affects the people's capacity to settle a sufficient way of life (Cummings & Wise, 2001).

The government presents public goods through managing the funds as well as managing the distribution of these goods, nonetheless, in many situations the goods are essentially presented by the private sector, the personnel for the armed services are an exemption, except even for defense, most of the equipment and weapons are manufactured by the private sector; the government distributes the nation's currency, levies taxes, as well as while taxes do not deal with national expenditure, loans money by delivering government securities (Lipford, & Slice, 2007).

Cummings and Wise (2001) said that there are four main theories concerning the role of the government in the economy, including: Laissez-Faire Economics, Keynesian Economics, Supply-Side Economics, and Monetarism.

The thought of laissez-faire economics is for the government to desist from participation in anything that will have an effect on the economy, the system comprises the thought that the government should not control the marketplace, workforce, environment, as well as permit the economy to move as well as develop naturally (Cummings & Wise, 2001).

Keynesian economics is the reverse of laissez-faire economics which is from the thoughts of John Maynard Keynes, the scheme declared that if the public did not use or invest enough into the marketplace, the government should intervene furthermore control the economy through fiscal policy that engaged either tax cuts or increased spending to combat recession, Keynes said if the government had to spend money to battle recession, the consequential deficit was not bad for it was necessary (Cummings & Wise, 2001).

On the other hand, supply-side economics is an economic assumption designed to combat the effects of inflation, it arranged for tax as well as spending cuts that would in turn provide the public the incentive to produce as well as increase the supply of goods available, the decline in tax would allow more money for the making of new factories as well as job growth, consenting, supposedly, for the benefits to pour to the people (Cummings & Wise, 2001).

Finally, monetarism is the initiative that the amount of money in distribution needs is an important issue in the way the government can control the economy, those who aids this theory deemed that the government needs to be able to guarantee that the money supply increases along with the economy at a steady pace, at the same time as calculating interest rates as well as other factors that might have an effect on the economy (Cummings & Wise, 2001).

In Lewis' December 7, 2007 article in The Denver Post, he said that "Bush claims his move does not constitute federal intervention into the allegedly free market that his administration pretends to cherish and champion. It's just a 'voluntary' deal to help out a few folks." My belief is that awful judgment, terrifying strategy, unrestrained greediness as well as defective thinking must not be content by means of a bail out for effects will not transform without a letdown for the government is more distressed on salvaging it's image rather than serving the public who will shell out the bailout cost.

As I see it, Former President Bush's plan, the working class was trapped with the rate with no considerable advantage, giving permission to the new fiscal entities rise up from the rubble, perhaps the country can get by with two independent investment banks, new banks will morph from failure, the government must get ready to go into business, why worry getting possessions simply to sit on them, the government need to do something since they have the controlling interest.

Basically these problematic corporations have been auctioned off to the public, by allowing the people manage credit banking not for revenue but for the advantage of all; like creating a truthful, supportive as well as reasonably priced health insurance supplier.

Former President Bush wanted to support the institution, providing a shove therefore it can boot a new beginning but it can also be seen as a prospect or a way leading to corruption -- as I watched the television at those time, there are people who believes that the rich executives can stop working when they have gotten the payment during the bail-out.

Lipford and Slice (2007) said that the eighteenth-century Scottish moral philosopher, Adam Smith, "the ideal functions of government were few and well defined;" where Smith's wrote in 1776, 'An Inquiry into the Nature and Causes of the Wealth of Nations,' he showed that three essential government roles such as national defense, administration of law and order, as well as the providing certain public goods.

In Madrick's article in the New York Times, dated May 11, 2000, he believed that there is a great economic presumption in sustaining a part for government and quoted Adam Smith's saying, "The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature that the profit could never repay the expense to any individual or small number of individuals." We can see here that many economists are familiar that a number of assets of vital advantage to the public in totality may not be made through business for the reason that there is not one corporation nor an industry that can collect every profit.

The incessant high rates of social expenditures might require higher taxes, larger deficits, or striking cuts in other government programs, for instance those considered vital; these may begin slow private capital foundation, lower economic development, a continuous economic reduction as well as these outcomes are the opposite of Smith's model for economic prosperity (Lipford & Slice, 2007).

The government has two methods to rouse the current economic state which is to increase the government spending or implementing tax cuts; even as many people really highlight their backing a person who wants to run in office, people really needs to recognize that tax reductions, leading to more government loan -- decreasing private investment that can result from an increase in government expenditures, as spending does, this is not the ideal answer but it is better than government spending (Singerman, 2008).

Singerman (2008) stated that while the government expenditure changes, collective demand is absolutely affected through the entirety in the change in spending that when the government raises spending cumulative demand can be directly affected by the increase -- if the demand increases, prices will rise until supply and demand are again at equilibrium; the new equilibrium as well as the gross domestic product will be increased by an amount equal to the increased spending -- both of the tools, taxes and government spending, will stimulate the economy; however, tax cuts put dollars in the hands of every people instead of getting it from the government funds.

And a tax cut would mean that the regular taxpayer will need to shell out a smaller amount of money to the government, this may appear like an evident statement, however, the realism of the words must be considered; consequently, every home in the country will have an increase in their disposable income -- every home will have more money; essentially, this is comparable to a raise; moreover, for the reason that the public will have more money, people will be able to have enough money to pay for more of the things they need and the additional money that were spent in taxes can be used for a vacation, a new car, or other purchases that may have seemed out of the question (Singerman, 2008).

The way I see it, a raise in the disposable income will result in a rise in consumption for the reason that the people will have extra funds to shell-out and additional employment can be made to sustain the demand of products and services -- a rise in consumption affects aggregate demand and an additional extended advantage that must be cited is the increase in consumer demand will result in more jobs that will increase the stability, for as supply rises, prices will fall -- which signifies a long-term benefit of a tax cut is that prices will drop.