Does the Government have any control over the economy?

Question

People blame the President (Bush this time) about a slow economy, but is there anything he can really do, either to change it, or to have caused it in the first place? I thought the economy was just about how much we as citizens buy and sell products.

Answer 1

People who blame Bush (or any other president) for a bad or good economy are fools.  Congress has more control over the economy than the President - the President can only sign bills, and our current President will sign pretty much anything.  As a Libertarian, I have to agree with the above poster - the best thing a Gov't can do is stay the heck out of business.  The person with real power over the economy, however, is the Chairman of the Fed.  He does not serve "at the pleasure" of anyone - therefore, he can do pretty much whatever he wants, without having to please anyone.  He controls interest rates - which can destroy an economy, and sure has done a number on ours.  Quick explanation - when the Fed lowers interest rates in order to inspire consumer confidence (as opposed to lowering them due to a large volume of savings), it encourages borrowing.  The problem is, because people aren't saving much money, banks can't afford to fund all the borrowing - therefore, for large sums (which generally go to huge corporations) they get loans from the Fed - who literally write a check on themselves.  In other words, when it comes time to cash that check, they simply print money.  As a result, large companies get this money inflation-free, as it has not been in circulation yet.  They spend all this money on contractors, labor, etc and inflation occurs.  Each time this money is spent, inflation occurs over and over again, until it reaches us "average" Joes.  At this point, it is worth a great deal less than it was worth when it was initially spent by "big business", which results in what is essentially a tax on the lower and middle class.  This results in the extreme devaluation of the dollar we are experiencing today.

So, before you blame Bush for the current economy, stop and think.  The lion's share of the "blame" goes to people who live beyond their means, and the Chairman of the Fed. Reserve.  Thanks to the two major parties, we have a dollar that is backed by absolutely nothing except our Government's word, and a person who answers to nobody who controls interest rates.  Wanna fix it? Vote Ron Paul.... but since it's too late for that, vote Libertarian.

HUCKLEBERRYJAY

You seem to not understand what the free market is.  The banking industry, the housing industry, is VERY heavily regulated already.  We had politicians complaining about how "poor people" couldn't get mortages, and put pressure on banks to be more liberal about giving out loans, and this is where we got.  Considering that there is pretty much no example of a free market industry in this nation, you can't really point out an industry as an example.  Your examples are perfect instances of the failure of regulation.

EDIT

Jake, are you serious? Did you refer to me as a liberal? And by "hogwash", do you mean the Constitution? Congress has no right in the first place to ban drilling - it shouldn't even be an issue.  If Dems would follow the law, there wouldn't have been a ban in the first place.  And the answer is still, no - Gov't has little to no control over the economy.  What Bush said may have triggered a drop in price, but speculators have the real control.

Answer 2

My direct answer to your question is---my view is they have very little control at this time----the horse is out of the barn and who knows where it will run----government could have had control of OUR economy by keeping the mfg. base of our country intact inside our borders by not having incentives for industry to move overseas----also the government has delegated its monetary policy and pays for the use of its own money which has now squeezed the workers of this nation with a declining value of its currency and inflation that acts as a tax on the laborers, while taxing his receipts of said labor.---Supply and demand will find its own way if government will stay out of the mix---this includes goods and services.

Answer 3

It's BECAUSE the government has control over certain aspects of the economy that is why the economy is suffering. Subsidies and tariffs, socialistic programs, etc.

If the government just stayed the h**l out of it and let free market economics take over, we wouldn't be in this quandary.

Republicans and Democrats both are at fault. Both advocate large government involvement.

Answer 4

You're getting a lot of hogwash from the liberals here. Of course government has control over the economy.  Yesterday Bush ***** slapped the democrats for their no drilling stance and the price of oil dropped almost 10 bucks a barrel.  The democrats are now backed into the corner and will have to either stand their ground or crawfish and bring down the price of gasoline. And as you know, the price of oil will make or break our economy. Now watch what the democrats do over the next couple of months, and remember this come election time and how much the do nothing democrats have cost you at the pump over the past few months.

Answer 5

But if the answer is for the government to STAY out of things and let the free market figure it all out, then why is the Government having to bail out Bear Sterns and Indymac, so that our economy does not crash?

The idea that the free market is just going to fix everything is a complete failure and we are seeing the results of its failure everyday! It's a pipe dream! Th free market hasn't worked for the Airline industry, it hasn't worked for the housing industry and now we're seeing it hasn't worked for the banking industry in all of these cases the free market has turnd to the government on its hands and knees begging the govt for help and money.

These people holding up the free market as a champion are either delusional or have not been watching any news program for the past 72 hours!

I have been waiting since 911 for this mythical free market to kick in and stand on its own two feet like the eco 101 text books say it should.... It just simply hasn't happened.

Daniel you make about as much sense as your master in the white house. On one hand you say let the free market reign, on the other hand you say but there is no free market in the Unitd States.You say all industries are so heavily regulated that the free market has gone completely away. Yet for the past 8 years you have had a Republican president and six of those years a Republican Senate and Congress but yet some how none of this is their faults.

If you can't see how ludicrous that sounds then no wonder why the country is in the shape it is today.

Answer 6

erick is right.  dont forget the fact that the federal reserves policy of printing money that is not backed by gold, or anything for that matter, makes the dollar devalue at an incredibly fast rate.  vote libertarian if you want the economy to improve.

Answer 7

He can take many steps to bust up the economy. I don't advocate it but even a war with Iran or Pakistan can change the economy over night!!!