Our founding fathers were concerned that government would overstep, become too much of an influence in peoples’ lives. That said, however, the first rational counterargument to that belief is our government would not exist without people. Secondly, that we have developed an ingrained belief in the right to life, liberty, and pursuit of happiness. Those three key points should include the ability to have and provide adequate shelter, ample food to avoid starvation, seasonally appropriate clothing, and meet all basic health needs. The desire to become a commercial nation and leave agrarian roots and policies behind, moved citizens as a whole toward being dependent on commercialization.
To put it more bluntly, it is easily argued that our government owes its citizens everything in that it owes its very existence, and created a society dependent on the practices allowed, governed, and enacted by the government.
Coming to this conclusion, we can reconsider our original question – what is the government’s role in stabilizing the economy? Is it best to follow a more laissez-faire policy along with the idealism of a democratic, free marketplace? Given our founding fathers’ fears of too much government intrusion, the Classical approach to economics seems justifiable as a guiding principle. But, for every political argument, there is an equal and opposite argument. The market model of Classical economics (the idea that the market will stabilize itself), is inherently true. The market will eventually stabilize itself, but in what timeframe and within what outer parameters ...
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...ndeed, while many, many people lost their jobs, it could have been much worse if the government had not stepped in. We could have had a repeat of the Great Depression, but we did not.
Investigations after both the crashes of 1929 and 2008 revealed irregularities in banking practices. Our financial houses were built on insecure bases. With government interference, the market crash did not become full-fledged depression, merely another stage of recession.
Yes, I believe that the government has an implicit responsibility to its citizens to provide a relatively stable economic market – with a caveat: that there is still plenty of room for free market economy as well. Eventually, another greed-minded banker will circumvent banking laws again, the result could be worse than the Great Depression, and that neither Classical or Keynesian Economics will be able to help.
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