The real problem? Defining the role of government

The real reason for the dysfunctional government is the lack of a good definition for the role of government.  Here is one that works. Photo: Roll of government/ AP


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WASHINGTON, October 12, 2013 — The federal government has shut down all non-essential services because Congress and the President can not agree on a continuing resolution to pay the bills.  While each side points fingers at the other, what really is the problem?

There are actually two problems causing this situation.  One is the lack of leadership and the second, more serious problem, is that we do not have a clear-cut definition for the role of government.

Leadership starts with the President.  There are numerous definitions for leadership but most of them define a leader as someone who can show the way to reach a goal, or to guide or direct. A leader should also be able to motivate others to follow in the direction that he sees, or the vision that he has.  A leader can resolve conflict by bringing the opposing parties together to find mutually acceptable solutions.  By that broad definition, President Obama is failing to provide the leadership that the majority of the people elected him to provide.


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In the current budget stalemate, he has done more to separate the sides than to unite them.  He should, as past Presidents like Bill Clinton or Lyndon Johnson did, bring the opposing parties together with the idea of “seeking a solution” rather than his current course of action where he tries to “sell a position.”  The primary cause of the budget problems today and the likely problems with the debt ceiling in the coming weeks, is a lack of leadership from the person that we selected to be the top leader. If the President decides to lead, the current budget problems can be resolved relatively quickly.

But the more serious problem, defining the role of government, may be more difficult to solve. In any Economics 101 class, the students are told that one of the basic principles of Capitalism is a “limited” role for government.  The problem is that for the past 235 years or so, we have been trying to figure out exactly what “limited” means.

To the President and the Senate, limited has a much broader meaning than it has in the past.  Currently, the government is in the process of taking over the entire health care system which accounts for about16% of economic activity.  Prior to the Obama administration, government provided healthcare was never included in the definition of limited.  And there are a number of other services like student loans for higher education, for instance, that the federal government has taken over.  After the Affordable Care Act is fully implemented, the federal  government will control more than 35% of economic activity.  Add in the state and local government and the total amount of government control, exceeds 50%.  This is very dangerous to our long term freedom oriented society. It is also counter-productive to a free market economy.

What is a good definition for the role of government in a Democratic Society?


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The definition that I have always used is: the federal government’s role should be limited to 1)providing a minimal amount of public goods and 2) prevention of disaster  . While there is wiggle room when we define public goods and when we define a disaster, the guideline should be geared toward limited.  The current administration has far exceeded this definition which explains why government expenditures are at such a high level and why the other side is so strongly opposed to his actions.

As a guideline for determining what falls into the category of a public good or prevention of disaster, policy should be geared to take action which benefits the majority of the people while taking care not to infringe on the basic rights of anyone.  Clearly, the President’s policies fail this test.  In fact, almost all of his policies are geared to benefit the bottom 20% of the population while the remaining 80% are damaged.  This is contrary to virtually every view of the role of government in a Democratic society.

While it is true that there will always be disagreements between parties, we should welcome healthy debate.  In a Democracy, it is healthy debate that moves the country forward in a direction that does indeed benefit the majority of the people while considering the basic rights of all citizens.  Taking positions like “I refuse to negotiate” or “you lost the election, so we will do it my way” or “pass the bill to see what’s in it” are not only counter-productive but will cause great harm to future generations.  And, above all else, we have a responsibility to protect our children.

(Michael Busler, Ph.D. is a public policy analyst and an Associate Professor at Richard Stockton College.)

 


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Michael Busler

Michael Busler, Ph.D. is a public policy analyst and an Associate professor at Richard Stockton College teaching Finance, Financial Institutions, Introduction to Financial Management, Game Theory, Graduate Managerial Economics, Graduate Financial Management. 

 

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