Our Government

Is our country really we the People? Or is it the Government rules the people? Throughout our history people have lived under a democratic government but I think that is starting to change slowly. As the government signs bailouts and releases stimulus packages our economy is becoming less and less of a free market. The government has started to intervene and regulate our economy in many ways.

The accumulation of debt has put this country in a fiscal cancer as the I.O.U.S.A. movie called it. We have dug ourselves into a 53 trillion dollar hole and every year 2 to 3 trillion dollars are added on. In addition all these bailouts and lifelines could end up costing the government 23 trillion dollars. World War II cost 4.1 trillion in 2008 dollars but the New Deal that saved the economy didn't even come close to that. But rather than worrying about it and curing it the government more or so is trying to capitalize off of it.

The 700 billion dollar TARP bailout was initially released to stimulate and save many of the big companies, but it has turned into more than that. The negative aspect of the Tarp is that the government is digging a deeper hole for themselves by accumulating so much debt. The dangers are significant. As the government spending rises by 1 percentage point, the economic growth rate falls on an average of .13 percent. These costs could be a burden for the US economy for the years to come. But the beneficial aspect of the TARP is the control the government is gaining. Since the financial crisis has begun, the federal government has used tax payer money to inject capital into financial firms in exchange for ownership. The failing Fannie Mae and Freddie Mac were taken over by Washington. AIG the world's largest insurance company is 80 percent owned by U.S. tax payers. The government has picked the winners( bear sterns) and losers( Lehman brothers).They have become owners/shareholders of many banks and big companies such as G.M, Goldman Sachs, and Bank of America.

I must say I know that the government regulates monopolies but what will happen when the government becomes a monopoly?

In an article by Michael Truman, Obama states that he doesn't want to control of banks or auto companies, he says he already has too much work. But I think on the contrary the government does. Another article in the Wall street journal states the banks are being controlled. The TARP money that was lent out wasn't just a party check. The banks that the money was given to have regained from the recession are sitting on a lot of cash and want to pay the government back with interest but the government is refusing and the chairman of the banks are left at the hands of the government who are threatening to run their business and regulate the pay scales.

Throughout the years of setting minimum wages, now the government is telling some companies how they should structure their pay. Although we know that the bailed out companies are at risk and can be regulated but the companies who have not borrowed any money are also being threatened. In a recent article the treasury and the fed state that they can steer the economy the right way and cut the unnecessary bonuses executives get. In the same article, Obama states, "I have always believed that our system of free enterprise works best when it rewards hard work." Personally they should just worry about the fiscal cancer and stop regulating the so called free market economy.

Many economists say that the level of government involvement has not been seen in decades. In addition to that many also worry about the unintended consequences of the in involvement. If the government stays too long which appears to be, the executives that are under the control will most likely leave and join nonfinancial firms leaving a sector with less qualified or experienced managers and another problem arises once again.

In my opinion, the Tax money that is collected should be used to pay off our national debt rather than trying to bailout companies who don't need to be. Lastly, the government should stay as the government and let the people and businesses be people and businesses.

Even in many polls people are saying that the government is doing too much, I think the government should lay back. I agree the government has the right to intervene and make things better in economic times but every time the government intervenes a deeper hole is dug causing more and more problems. The government's first and only concern should be to pay off the national debt because if it keeps on accumulating, it will become worse than a pandemic. Companies that have become too big to fail need constant support but I believe should not get any. In other terms it should be survival of the fittest, all theses life lines that the government is constantly giving is doing us no good. Let it be lassies faire.