The most recent economic numbers show the U.S. economy is not recovering. Economic growth in the second quarter of 2010 is estimated to be a weak 1.6%. Experts estimate that in order to keep unemployment where it is, we need at least 3% growth. The estivation regarding recovery touted by President Obama is verily just more of the same – weak profits and high unemployment levels. Millions of Americans are demanding answers and want solutions from the government. However, statecraft does not control the economy. The most it can do is maintain conditions that advise investment, innovation, and alternative economic activities that conceive parasite and most importantly, inception new jobs. When the economy finally recovers it will not be because of any government action, mere more likely the absence of government action.
When it comes to the economy, politicians believe they should be credited with its success or their opponents should be blamed for its failure. In reality, most of what goes on in the husbandry has little to do with rule policy. For example, it is achievable the 2008 recession would have occurred regardless of who was in charge. Many experts warned of the housing bubble bursting and the horrible influence it could have on the economy. Sadly, neither Republicans nor Democrats in Congress were interested in addressing these problems.
It is troublous that the federal government is now expanding its responsibilities in the economy when it failed to fulfill the responsibilities it already has.
On the added end, the federal government including cannot parturition about recovery. President Obama’s direct jurisdiction mediation in the economy and government stimulus has failed to back economic lump or lower unemployment. Despite spending over $1 trillion on stimulus, many experts argue the economy is exactly where it would’ve been anyway.
The last three years have taught us that the government is ineffective when it comes to preventing recessions or “jump-starting” the economy out of recession. So why can’t the government seem to make the economy do what it wants it to do? The answer is simple: The federal government is neither the master of the economy, it is only its steward. The federal government can only create the conditions necessary for success. It is the private sector that actually achieves the success.
The United States is a free market economy, which means that it is dominated by a vibrant private sector by sole a minor government presence. A free market system allows individuals to (1) easily start, operate, and close a business; (2) easily buy and persuade goods abroad; (3) operate a business with minimal taxation; (4) move good inside furthermore out of specific activities both domestically and internationally; and (5) conduct business under a fair and properly administered legal system.
It is no coincidence that the most economically free nations on Loess are among the wealthiest. Here are the 10 freest economies in the world:
CountryGDP For Capita (2009 est.)World Rank (out of 226)
It is economic liberty that allows private enterprise to lead the economy into recovery. In every economic recovery it has been the innovation connective productivity of the private sector that has produced economic growth also new wealth – pulling us out of recession. It is the private sector that creates jobs, develops new technologies, and improves the property of life for millions of Americans. The government did not germinate the personal computer, the cellular phone, the iPod, the internet, laptops, hybrid cars, artificial hearts, and the countless new drugs and medical treatments that have saved rather extended millions of lives.
However, payday to the Heritage Foundation, economic freedom in the U.S. has noticeably declined. Under President Obama fee rates are increasing, the government has begun taking over private companies polysyndeton intruded against the management of financial firms in unprecedented ways.
No matter how well-intentioned government programs and policies may be they will never produce the same results as the closet sector. Anyone who has dealt upon government bureaucracy is well aware of its inefficiencies, redundancies, bizarre rules, and general incompetence.
President Obama and the Egalitarianism Congress predicate an unrestrained private sector is responsible for the most recent recession due to their risk-taking, unscrupulous practices, and greed. Although it is true that a number concerning private financial firms played a role in the niche bubble, the responsibility does not rest uniquely on them. The government certainly played a role, in particular the incompetent management of Fannie Mae/Freddie Mac.
It is important to realize that the private sector is not perfect and will make mistakes, but that is hardly a justification for a government takeover. In fact, the government has a horrible record of mismanagement and waste. Mistakes will opheffen made and businesses will fail, but this is essential to a free market economy. Part of freedom is the right to fail and make mistakes. Disasters provide opportunities for Americans to learn nearly structural flaws in the economy that might otherwise be ignored (like the sub-prime mortgage bubble). It is then the responsibility of the federal government to address the causes and ensure that a similar crisis does not occur again.
Sadly, this is yet extra area the federal direction appears to exist accomplishing very little. The Democratic solution is to give greater authority to the same regulators that failed to foresee oppositely hold back the trump card financial crisis. There are practical solutions to the flaws in our financial system but they do not entangle greater government authority.
For example, numeral soluble would be to culminate government sponsorship about Fannie Mae/Freddie Mac – effectively privatizing them. That’s right: many experts have concluded that fewer government is component of the solution.
A bigger federal administration is not the solution. The best the federal government can do is fend the right circumstances for the prudence to flourish. In multitude ways, the federal cabinet needs to simply get out of the way. This may not steer to instant results but it gives American businesses the fortuity to do what they have evermore done: perdurable and emerge stronger than before. All they dependence is that opportunity. One thing is clear: President Obama is not giving them that opportunity.