Government and the Economy

Discussion in 'Economy' started by dblack, May 26, 2012.

  1. dblack
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    dblack Gold Member

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    As a libertarian, I don't think government has any business manipulating the economy.

    Now, I don't expect to get much support on this from Keynesians or FDR liberals, but I do sometimes hear conservatives talking along these lines. Unfortunately, it seems a fairly selective principle for them and - especially come election time - they are as enthusiastic as their liberal counterparts in advocating government that 'creates jobs' or brings down 'prices at the pump', etc, etc...

    Is it really the job of government to make sure we all have good jobs? To ensure economic growth? To control interest rates on loans? Do we want government to have that kind of control over our lives?
     
  2. Middleoftheroad
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    Middleoftheroad Active Member

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    It is their job if they want to get re-elected. This crosses all party lines. If the economy sucks comes election time, the party in power losses. This is probably the biggest thing that pursuades people to vote one way or the other or at all. Even if people don't think they want it to, they sure do vote they like want it too.
     
  3. itfitzme
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    itfitzme VIP Member

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    Funny how it works that way. Seems like some folks make an artificial distinction between the government and the populace. They are not identical, of course. Still, they are not entirely distinct. The populace, in one way or another, causes the government.
     
  4. dblack
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    dblack Gold Member

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    Yes indeed. To the extent that a government is operating democratically, questions of limited government really boil down to questions of how much, and under what circumstances, the majority should dictate to the minority.
     
  5. dblack
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    dblack Gold Member

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    You may be right. If so, I'd cite it as central to our political dysfunction.
     
  6. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    I don't think the GOP is advocating that the gov't should be creating jobs or lowering prices or growing the economy. They want a smaller gov't with less intrusion so the private sector can do those things. Where'd you get the idea that it was otherwise?

    Seems to me that gov'ts job is not to manipulate the market but to regulate it enough to where there's enough transparency and accurate, timely information out there for everyone to make intelligent decisions. It should be gov'ts job to ensure a fair and competitive market is out there for everyone to have a fair shot at doing whatever it is they wanna do. It's not true that the repubs want no gov't or no regulation, that's anarchist. What they want is only what is necessary and effective.
     
  7. dblack
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    dblack Gold Member

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    I get it from looking at what they do when they actually have power, rather than "advocate" when they don't.

    Agreed. Our dispute would seem to be over the gulf between what the GOP says it wants and what it does.
     
  8. itfitzme
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    itfitzme VIP Member

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    I agree with your general sense of what the purpose of gov't is.

    Mitt Romney and other GOP candidates say they can create jobs. This is where I get the idea, because they claim it.

    Because they complain about prices, about inflation. Mitt Romney, again, complains about inflation. Because they complain about the price of gasoline, blaming the government rather then the free market.

    Because they do not talk about the government's purpose as you have stated it.

    Still, what they say is not what they do. When it comes to actual actions, with regard to the GOP, this is not the impression I am getting. I get that, fundamentally, they want to cut off government funding until it becomes so small they can "drag it into the bathroom and drown it in the tub."

    They do not want a balanced budget. This is what they say. What they want is to lower taxes, especially for the upper income brackets. If balancing the budget was their intent, they they would balance the budget first.

    I cannot imagine where you got the idea that the GOP wants just "smaller gov't with less intrusion so the private sector can do those things." What they want is no government involved in the business markets except in that it restricts the other guy.

    You are right, they are not anarchist. Libertarians are anarchist.

    What the GOP wants are rules that restrict the freedoms of others, just not themselves. The GOP are the worst offenders of personal and individual liberties. They consistently demonstrate prejudice, at one time blacks, now women reproductive rights and gay marriage rights. They are in-group/out-group thinkers, dividing the world into to types of people, Republicans and liberals. There are to types of people in this world, those that divide the world into two types of people and those that do not. The GOP are the ones that divide the world into two types of people.

    The free market has every opportunity to do whatever it wants to do. Our government does not anticipate market failures. Rather, it only reacts to them. And the government does, though slowly as all gov'ts do, changes it's position as society and markets change.

    The GOP, as a loosly knit group of dysfunctional and disjointed goals, does not demonstrate a focus on increasing output or standard of living. Output, and increased employment along with an increase in standard of living is not a singular function of revenues and profits. It is a function of price and quantity. And price is a function of a restricted supply as it is a function of anything else. Even GDP maximization, a function of price times quantity across all markets, is just as easily increased by shorting supply as it is by increasing output. The focus of the GOP, and their myopic and over simplified models of the real world do not lead to the the claims that they wish to make.

    The GOP, and all the data I can find, shows no real interference in the markets. The fact that there are safety labels on the side of mop buckets hardly constitutes market over regulation. (One guys example). Reduction in taxes for capital gains and top marginal rates has not been demonstrated as being effective in increasing output. And if reducing them didn't increase output, then they were not restricting output.

    There has yet to be any demonstration of the federal government is crowding out macro economic business growth or opportunity. If the markets want to build a better jet fighter, the markets are free to do so. If the markets have a better pesticide, the markets are free to do so. If the markets want to provide road services and transportation, cheaply and efficiently, then the markets are free to do so. If the markets want to provide delivery of mail and packages, it is free to do so, and it does.

    I am with you that the function of the government is to ensure a balanced market, as close to the ideal competitive free market with perfect information, as possible. It begins with contract enforcement. It includes limiting monopolies and oligopoly market behavior and dominance. It includes ensuring many basic group behaviors like driving on the right side of the road and not shooting other people. It also means finding a balance that ensures that people are able to make personal choices that affect themselves and themselves alone.

    None of which do I see as the GOP intent. All to often, they blame market failures on the federal government, like the housing boom and bust which was a free market problem. They want to implement the gold standard, out of some misguided belief that it will impose rules, rather than accept that the markets are quite happy with fiat money just the way it is. The examples seem to go on and on, not all prescribed to by every single member of the GOP, but in the greater body all adding up to high personal restrictions on other people's freedoms and no restrictions on their personal business. In the end, lacking any other group to blame, they would simply degrade into spliter groups, blaming each other.

    But, that's just a general impression.
     
  9. Wiseacre
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    Wiseacre Retired USAF Chief Supporting Member

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    What gulf is that exactly, is it all that large? Since when has the GOP not been trying to promote the private sector over the public one? Since when have they pushed for more gov't intervention and more regulations? Tell me about all the instances where the GOP has done the opposite of what they stand for, and keep in mind they didn't have the luxury of a filibuster proof Senate and control the House for all the Bush years. Certainly didn't under Bush 41 or Reagan either.

    I'll give you the Medicare Part D Drug Prescription program, and the TARP and bank bailouts. I didn't much like the greater spending much either, but should we castigate them for it? Emergencies sometimes call for actions that are counter to what you'd normally not support. If you wanna say that because of these events the GOP says one thing and does another, well have at it. Sometimes good governance means doing extraordinary things that are in the country's best interests even if it means contravening your political position.
     
  10. Paulie
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    Paulie Platinum Member

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    Not all of us believe an "emergency" is as bad an "emergency" as we're told it is, first of all.

    And yes, the GOP had a pretty good shot at doing some really great conservative things during Bush's term, especially during the 2 years of congressional control, and they did NOTHING good with it. Nothing was done about entitlements, and spending continued to increase. The Bush tax cuts could have had so much more historic appeal if they'd been accompanied by some meaningful spending cuts when the opportunity was there to make them.
     

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