GOVT 200 Liberty University Government Budgetary Process Economics Analysis

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GOVT 200
ECONOMICS ANALYSIS ASSIGNMENT INSTRUCTIONS
OVERVIEW
For this assignment, you will write a 2–3-page paper (double-spaced, 1-inch margins) providing
at least 1 example of how government has overstepped biblical principles in some form of
economic policy. Be sure to adhere to the format specified in the Course Style Guidelines
document.
Options include the following topics:
• A specific piece of legislation relating to business regulation or taxation.
• The “party platform” of either the Republican Party or the Democratic Party (or both).
• The role of the Federal Reserve.
• The budget process.
In discussing one of these topics, incorporate clear references from the Learn material in the
assigned Module: Week.
INSTRUCTIONS
Follow the below instructions to compose your assignment:
• Length of assignment – 2-3 pages.
• Make sure to include a bibliography page
• Format of assignment – Course Style Guidelines
• At least 2 sources
• Acceptable sources – Scholarly articles published within the last five years, the Bible,
online articles given as assignments, and any other pertinent source that helps the student
answer the assignment prompt.
Note: You may submit your assignment to the Economics Analysis: Draft Submission
Assignment to check your paper for plagiarism. Your assignment will be checked for originality
via the Turnitin plagiarism tool. After reviewing your Turnitin results, make any edits necessary
and submit your Economics Analysis: Final Submission Assignment.
The Current State of Economic Regulation
Welcome back class. I hope you’re enjoying the course so far we’ve got another great week for you. As
our 40th president, Ronald Reagan said, as government expands liberty contracts. And that’s really what
we’re going to be discussing this week, is every time the federal government, state government and the
local government enacts a new policy and x and new regulation interferes with the free market at some
point. Does that allow freedom to expand or does it cause it to contract? So again, that’s what we’re
going to be discussing this week and we’re going to learn, are there times when government should get
involved? I’m sure you can think of times where it was necessary for government to make sure that its
presence was felt. Think of what areas in monopolies. For years and years, our government has sought
to protect the free market, the free enterprise from monopolistic tendencies that so one company
cannot corner the market. Because what happens once a company cornered the market? They raise
prices to whatever they want to. There’s no competition to make them better. There’s no innovation,
there’s no Really ability or chance for them to get better and improve because nobody’s pushing them
to do so. And so that’s one I would think legitimate area, we would all agree with that to make sure that
there’s no monopolies in our free enterprise system. Sometimes government has to step in. Where is
another place that government interferes? Well, I would say our military. Lot of people say, well, I can
defend myself. The Second Amendment gives me the right to keep and bear arms and protect myself.
Yes, that’s true. However, on a state level, on a national level, we need protection. So our military comes
in and protects all of us. That’s not something really one individual person, a really small group of people
can do. So a lot of times we say, well, the government shouldn’t have this or have that. But in a military
sense, we can’t think of anybody better to fulfill that role or to come in. So there’s some legitimate
forms of government. There’s some legitimate areas where government needs to get involved. And
again, that’s why we go back to the concept of limited government. Our founding fathers said we
needed to have a limited government. Not that it needs to be small enough, that it needs to be weak.
But in the areas where there’s actual jurisdiction works in its sphere of sovereignty, in the government
acts robust, that it acts through its full force in nature, but only within those limits. Like a fire, right?
When you have a fire in your fireplace, it keeps you warm. It can give you energy. I can do all those
things that you wanted to do for very good purposes. But if that fire gets outside of the fireplace, it
becomes destructive. It can get out of control and it can even lead to loss of life. Or government is much
the same way when it’s acting within its proper bounds, when it’s proper jurisdiction, such as
monopolies the military, other services that government needs to provide, then it’s doing its job. But
when he gets outside of that, that’s when it becomes harmful and the effects are terrible. And so you’ve
seen this probably over and over again in your state, maybe on a national level, even at the local level
where the government says, we need to fix a problem, so we need to get involved. We need to regulate
this. We shouldn’t allow people to buy that or we need to do this. Well, is that the proper role of
government? Every time you hear one of those, you need to say, is this contracting my liberty is this
expanding government and an unwise way. And I would say anything that the free market can do, the
free enterprise can do on its own, probably isn’t the province of the government to get involved with
that, a federal, state, or local level. And I would also tell you if the state can do it than the federal
government should not get involved in it. The local level can do it, then it’s not the purview of the state
to come in and try to fix the things. And I’ll tell you one other thing that we see over and over from
elected officials and politicians is whenever a crisis arrives or whenever something comes up that they
don’t feel is right, they seek to take immediate action. We gotta do something quickly. We have to show
that our voters, that we’re working on, something, that we’re doing, something to make sure that they
know we’re working hard, will sometimes that small action can have disastrous long-term consequences
and even worse, some unintended consequences from those actions. So we need to make sure our
elected officials are measured, that they’re wise, that they looked at issues with a discernible approach
to know. Is this the right jurisdiction for government to act? Number one, if so, is this the best
approach? And if so, are we doing it in the way that is the least burdensome on the taxpayer or the
voter. And if you hit all three of those things, then it’s probably a good policy is probably good legislative
items. So government interference is not always bad. And government interference is never, usually
always good. So with that bouncing approach, and that’s one thing we’re going to look at this week.
One, is it good and when is it bad? And hopefully by the end of this week, you can tell your local, state
and federal officials that’s a good idea or that’s not a good idea. And you can act accordingly. Looking
forward to sharing with you this week, god bless you.
Regulation: Do We Need It? When?
In this day and age, it is hard to go anywhere without running into an industry, business, or occupation
that is not regulated by federal, state, or local government. So it begs the question, is regulation helping
or hurting society? First, we need to understand the history of regulation in this country. Up until the
20th century, government took a laissez-faire or hands-off approach to the business world. However,
with the rise of the Industrial Revolution, new powerful corporations appeared on the scene. Federal
policymakers do these corporations worldly and believed they were harming the population through
price fixing. A monopolist. President Theodore Roosevelt was one of the most prominent leaders to
speak out on the issue. During his administration, he focused heavily on busting the trusts are
monopolies that had four. Through this process, he had in many agencies whose sole role was to
regulate businesses in certain industries. It was another Roosevelt, this time franklin Delano, who took
the regulatory framework to a whole new level. He was our nation’s longest serving president, having
served from 1933 to 945. During that time, he instituted the New Deal and along with it, a vast swath of
new agencies. These agencies seemingly covered every aspect of life. And since that time, the regulatory
framework has only grown. At times the growth has been slow, but a group nonetheless. So we again
asked the question, Is all this regulation good or necessary? While there are some that believe the
government should stay completely out of the private sector. Most people realize that the government
can play a legitimate regulatory role. There are four areas in which the government should legitimately
concern itself. For our break up monopolies, mitigate externalities, payment of public goods, incorrect
information, asymmetries. Taken from Arthur Brooks wrote your freedom 2012. Let’s look at each for
individually, monopolies are formed when one corporation corners the market on an entire industry.
This is a concern because that corporation can now shut out competitors, giving no incentive for that
corporation to deal in good faith. Therefore, it is incumbent on the government to break up the
monopoly. Secondly, the government can help alleviate externalities. Externalities are those things that
can affect a person’s well-being and yet are outside the market forces. Since there’s not usually a
correction mechanism in the market, it may be necessary for the government to enter C. Third is the
payment of public goods. As Brooke said, public goods can make markets fail because private sellers will
under provide them when people refused to pay. So the government doesn’t fund them that way.
Brooks 126. Finally, the government can help correct information asymmetries. Information
asymmetries occur when one side of the market has more information than the other and chooses to
exploit that difference. The government can then step in and help rebalance the relationship.
Necessary Evil or Unwelcome Intrusion?
In today’s political discourse, you often hear politicians say they are on the side of Main Street against
Wall Street. Wall Street is a euphemism to describe capitalism and industry. Because of this, capitalism
is often associated with the evils and shortcomings of business. Therefore, when a crisis occurs, such as
that of the housing banking crisis of 2008, the public cries out for measures to be taken against Wall
Street. These outcries inevitably lead to more regulations on business and private industry. The big
question remains, are regulations healthy for the private sector in the economy? We too often conflate
big business with the free market. Upon closer inspection, we will find that big business is often in
conflict with the free market. In fact, big businesses welcome regulation since they are financially able to
meet the demands of the new regulations, they helped drive away smaller competitors. And these
businesses can be seen lobbying elected officials or the new regulations. And that is where the break
between big business and the free market occurs. Regulation stifle entrepreneurs and small businesses
with increased regulations come increased costs. Studies have shown that regulations have cost the
American economy over $30 trillion since 1949. And unfortunately, the trend is getting worse. The
Heritage Foundation found that the cost of increased regulations in just four years from 2009 to 2013,
high-cost American businesses, $70 billion. So it’s easy to see the correlation between increased
regulations and the burden to the economy. And once again, it is the small businesses who bear the
brunt of these increase costs. Big businesses do much better in a harsh regulatory climate. So the free
market works best and the system work on light regulatory framework with all the regulations in the
country today, it is important to understand who was in charge of enforcing regulations. We have
already seen that the regulatory state begin exponential growth under Teddy and Franklin Roosevelt.
Along with the regulations came scores of new regulatory agencies. There are so many agencies today
that is hard to keep up with them. The problem with agencies being in charge of the regulatory state is
that the agencies are unaccountable to the people. Those who run the agencies are not elected. They
are appointed. When an agency acts on becoming, there’s little recourse for the public to make changes.
So the fact that these agencies have so much control over the lives of Americans through the regulations
they enforce and the fact that they are virtually unaccountable make for an uncomfortable situation.
We could look at numerous examples on how this format has burden the public and economy. But for
purposes of this week’s lesson, let’s look at one law and the agencies involved. The Affordable Care Act,
aka Obamacare, was signed into law in 2010. The legislation was over 2000 pages long and included
provisions to enact over a 110 new agencies. Accordingly, 21 federal agencies were tasked with the
implementation of the legislation. Even though the government had three years to get the legislation
implemented properly, it was unable to do so. The plethora of agencies involved cause the process to be
too inefficient. Everything came to a head in the fall of 2013 with the botched roll out of the new health
care website. And the website was just the tip of the iceberg. As the federal government continued to
find new problems implementing the law. These deficiencies caused the presidential administration to
take an unprecedented approach to fixing the deficiencies and your wall under the constitutional system
put in place, a president should petition Congress to make changes to laws that are not working
properly. However, the administration during this time began to unilaterally use agencies to accomplish
the same purpose. And the agency most responsible for those changes was the Department of Health
and Human Services. And each time the federal government would intervene or delay a law, it would
cause chaos in the market. One provision of Obamacare was an insurance companies must stop selling
certain types of coverage by the beginning of the year 2014. However, that provision seem too
unpopular in too drastic considering the failings of implementing the law. So in a speech, the President
announced that the provision in the law would not be enforced for at least another year. The insurance
companies were stunned, not because they agreed or disagreed with the President’s position, but
because they had already melt out millions of letters of cancellations to customers based on the law.
When the government provides no stability or consistency and the regulatory framework, it is hard for
the private sector to have confidence and what they can and cannot do in the future. Two main factors
to look at when reviewing the regulatory nature of a government, or if the regulations are light and
consistent. If so, the state can play its proper role without interfering too much and the private sector.
One area of regulation that has exploded in recent years is that of licensing. More and more, we’re
seeing that various occupations and interests are being licensed by the state. Licensing can be a useful
tool. Having license doctors, lawyers, and certain other industries gives the public confidence in the skills
of those operating in these arenas. However, the state can overstep its bounds when it seeks to license
occupations that do not want such state intervention. Today we see that occupations such as interior
designers, hair shampoo, and even a child’s lemonade stand are subject to licensing requirements.
Licensing requirements impede entry into the market. Let’s take the interior designers as an example.
An enterprising young woman likes to dabble in interior design. She has helped her friends and family
with decorating their homes and has received great feedback. They encouraged her to start her own
business. So she saves up for money and is ready to make the plunge. However.

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