American Economic Policies

Essay by NYC4UNMECollege, Undergraduate March 2006

download word file, 3 pages 4.0

One enduring theme of American economic history has been a continuous debate about when, and how extensively, government should intervene in business affairs. American history has seen the pendulum swing between laissez-faire principles and demands for government regulation. Liberals and conservatives alike have sought to reduce or eliminate some categories of economic regulation, both agreeing that the regulations wrongly protected companies from competition at the expense of consumers. Laissez-faire is the French term for "leave it alone". In economic affairs, laissez -faire is opposed to any government intervention into business affairs. It is a belief that private interests should have free reign. In a laissez-faire economic system capitalists believe that as long as markets are free and competitive, the actions of individuals, motivated by self-interest and self- betterment would work together for the greater good of society. In my opinion, the American economy benefits best from laissez-faire practices along with government intervention, this philosophy is one in which America already represents.

The governments' involvement helps to establish ground rules for free enterprise. The government plays a central role in the process of development. Government encourages market led development by using the tax system as an incentive for activity and a tool for income redistribution. More than half of the government budget goes toward redistributive activities of some type. Programs that are directly distributive, such as Social Security, Medicaid, and unemployment compensation, make up the bulk of the federal government's redistributive expenditures. Programs were created with the intention of increasing the income of people. Subsidized school loans and housing loans redistribute incomes to the recipient of those borrowing the money. These loans make it possible for activity in the economy. In short, the goal of the government redistributive programs is to use the resources of some taxpayers to improve the welfare...