In this political election cycle, the role of the government in the economy is b

Question

In this political election cycle, the role of the government in the economy is being heavily debated with some arguing that less is needed whereas those that the government should involve more. The events of Flint, Michigan with lead found in drinking water source highlights the dilemma of less vs more government. Using the chapter in the textbook, compare and contrast the role of the government in the marketplace. Use arguments which support a greater role of the government and contrast with why this role should be minimized. Is there a healthy balance?? Explain.

Explanation / Answer

Role of Government in the Market Place:

Government plays a major role in maintaining a balance in the economy. When there is high inflation or deflation, the government will come forward to balance the economy. The Government will tend to alter the interest rates for various savings, will try to participate in open market operations which might act as direct and indiret regulators for the economy. Government will only try to improve on the economy in order to avoid crisis. If the country is on a continious state of Inflation then this will lead to decreased spending and consumption. This will have a direct effect on the GDP, hence Government will take actions to balance the economy.

Government plays a major role in the following areas:

1. Responding during Natural Disasters ; National Disaster Management

2. Setting Standards for Workplaces.

3. Safeguarding from Terrorism

4. Protecting the environment and the list continues.

Government can reduce its influence in the areas setting standards for workplaces, since these days most of the organizations have the intention of providing safe work environment. It should set certain basic standards and make them mandatory. All other standards should be left to the convenience of the companies. The organizations should be sued if they dont follow the standards that are set as mandatory. Government should not involve too much in the operations of the companies, instead they should appoint a committe to go for regular inspections to all companies across the nation. When regular inspections are arranged, the organizations will start having self regulations and self accountability which will automatically reduce the role of the government.

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