Government Control over Economy Essay

381 Words2 Pages
The government should predominately control the commanding heights of the economy. The reason the government should be in total control over the markets is because “just going with the flow” so to speak by allowing the markets to lead would mean that there is no group of people to turn to when the economy needs help or is seeking too low of a trough or too high of a peak. For example, Joseph Stanislaw stated in Commanding Heights: The Struggle For The World’s Economy, “…the market economy would go to excesses, and when things were in difficulty the market wouldn’t work. Therefore the government had to step in.” One example include when the automobile industry started heading downward, the government had to step in and give them a boost to acclimate their economy once again. A second example occurred when the banks began selling US bonds to the government and the government began selling the bonds to foreign investors. The banks started out by having high expectations for their loan recipients but quickly ran out of people to fill this position. Soon after, they lowered their standards and began giving loans to people who wouldn’t be able to pay off their loans. The government then had to pay off the debt from for the portion of the population that owed the banks loans to stimulate the economy once again. A current day example is the Chinese economy troubles. Because the economy is expanding so fast, the government has to step in to prevent an economic crisis. Bob Davis wrote, “China’s growth is in danger of decelerating rapidly and without much warning.” If the markets were in charge, the economy would continue to increase and increase and lead into a sudden downward crisis. If the markets were predominantly controlling the commanding heights of the economy over the government, the economy would crash and have no ability to reappear in the most needed way. The

More about Government Control over Economy Essay

Open Document