Government Intervention

1. · to improve market infrastructure · to improve information · to improve institutional infrastructure.

2. The biggest advantage of government intervention is preparing for disaster situations, with the ability to deploy manpower and resources immediately.

3. Wages

3.1. Governments can create a minimum wage for all workers. The government determines that anything lower then the minimum wage is not enough for a person to live on.

4. Subsidies

4.1. The government gives certain sectors subsidies to produce goods. The government gives subsidies to lower prices on goods so exports increase.

5. Disaster Assistance

6. Market Interventions

6.1. Appropriate interventions are thus indirect in nature and have three general aims:

7. Arguments for Government Intervention

7.1. Market Failure

7.2. Macroeconomic intervention

7.3. Greater Equality

8. Arguments for Government Intervention to improve equality

8.1. Fairness.

8.2. Inherited wealth.

8.3. Diminishing marginal returns to income.

8.4. Rawls Social Contract.

9. A government big enough to give you everything you want, is big enough to take away everything you have. Thomas Jefferson

10. Government provides a number of programs to aid individuals in transition such as Social Security, unemployment insurance and health insurance programs

11. Government intervenes to protect "open access resources" such as water and air.

12. A government can levy taxes on its citizens in order to create social programs, build infrastructure and create a military.

13. Tariffs put a tax on imported goods to make domestic products more competitive.

14. Taxes

15. Tariffs

16. Environmental Interventions

17. Social Interventions

18. Arguments against Government Intervention

18.1. Personal Freedom.

18.2. Market is best at deciding how and when to produce.

18.3. Governments liable to make the wrong decisions

19. Government Intervention to Overcome Market Failure

19.1. Public Goods.

19.2. Merit Goods / Positive Externalities.

19.3. Negative Externalities.

19.4. Regulation of Monopoly Power.

20. We are imperfect. We cannot expect perfect government. William Howard Taft