The United States began its existence as a country newly free of the British Colonial ways and quickly adopted capitalism and its free market, Laissez Faire, ideology. As the economy grew, so did the government and their desire to influence or control the economy, as a means of maintaining equilibrium and fairness in the market place. More than two centuries later, the people of the United States began to doubt their Governments growing desire to intervene in the economy, which has gradually evolved the US into a mixed market economy from the pure free market capitalists we once were. Economic Interventionists and advocates of Laissez Faire have great supporting arguments for why their point of view is the best point of view, but the bottom line is, during the history of the United States, we have seen increases and decreases in the levels of Government Intervention, as well as failures in our previously established free market economy which can easily support the need for economic intervention. In order for a the US economy, a mixed economy, to continue to function and grow, the Federal Government must intervene and impose economic regulation to counter failures encountered in the markets for public and merit goods, and from excess market power in certain industries, better known as monopolies.
Public goods are an area of our market that can experience failure, when the market demand is not consistent with the actual demand from the public, which causes a shortage in the amount of public goods available for consumption. Investopedia.com defines a public good as, “A product that one individual can consume without reducing its availability to another individual and from...
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...Web. 15 Nov. 2013.
3) "Economics of Market Failure." Tutor2u. Tutor2U Limited, n.d. Web. 15 Nov. 2013.
4) Pettinger, Tejvan R. "Merit and Demerit Goods." Economics Help. Economics Help, n.d. Web. 15 Nov. 2013. http://www.economicshelp.org/micro-economic-essays/marketfailure/merit-demerit-goods/
5) Schiller, Bradley R. "Government Intervention." Essentials of Economics. New York: McGraw-Hill/Irwin, 2011. N. pag. Print.
6) "Terms Beginning With 'A'" Investopedia. Investopedia US, A Division of Valueclick, Inc, 2013. Web. 15 Nov. 2013.
7) "United States GDP." TRADING ECONOMICS. Trading Economics, 2013. Web. 15 Nov. 2013.
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