The Role of the Government

1
The Role of the Government
2
Brainstorm!

• What should the main economic role(s) of the
  government be?
• Lets see how well you can predict next semester

3
Four Economic Roles of the Government

•  
• 1.  Regulate Business 
• 2.  Provide public goods
• 3.  Promote citizens economic well being
• 4. Stabilize the Economy

4
Regulate Business

• A. Prevent abuses
• EEOC Equal Employment Opportunity Commission
• OSHA Occupational Safety Health Administration
• B. Protect Consumers
• FDA Food Drug Administration
• CPSC Consumer Product Safety Commission
• FTC Federal Trade Commission
• SEC Security Exchange Commission
• Federally insure banks
•  

5
Regulate Business (Cont.)

• C. Limiting Negative Externalities
• E.P.A. Environmental Protection Agency
• NRC Nuclear Regulatory Commission
• Fights traffic congestion, soil erosion, and
  pollution
•  
• D. Promote competition
• S.E.C.
• antitrust regulation to stop creation of
  monopolies

6
Provide Public goods

• Road Maintenance
• Public Schools
• Courts
• Law Enforcement
• National Defense
• U.S. Postal Service
• Must be available to all people whether it is
  used or not.

7
Privatization of public goods

• Some companies have replaced the government
  agencies such as
• UPS and Fed Ex
• Garbage companies

8
Promote Economic Well Being

• A.  Improve standard of living
• -Programs like Medicare and Social Security
• B.  Redistributing Income
• -Welfare programs help the poor

9
Stabilize the Economy

• A. Raise interest rates to fight inflation
• B. Lower interest rates to stimulate growth

10
In order to provide these things

• The Government must use a tax system!
• What is the best level/format of taxation?