The government plays multiple roles such as ensuring a legal system, promoting competition, providing public goods, ensuring economy-wide stability, regulating goods, redistributing income, subsidizing healthcare, and addressing economic issues in public education. The establishment of a legal system by the government is vital for maintaining nationwide stability. This system includes specialized institutions that understand and uphold the rules of the country.
The legal system has a crucial role in establishing property rights, enabling individuals and businesses to efficiently utilize property. It also fosters competition, stimulating economic growth and encouraging business innovation. This ultimately benefits consumers by offering more choices and technological progress. Additionally, the government’s contribution of public goods is indispensable.
National defense is a prime illustration of a public good. We collectively contribute taxes to sustain the military, guaranteeing security for the entire nation. Paying taxes or acquiring protection for an individual does not impede protection for others within the country. Additionally, it is crucial for the government to concentrate on upholding stability throughout the entire economy. Should unemployment rates surpass a specific threshold, intervention and aid from the government should be provided to rectify and reinstate economic stability.
Government purchases goods that are socially desirable, such as museums, for the benefit of society. On the other hand, the government also buys goods deemed socially undesirable, like cigarettes, and applies higher taxes on them. In addition, income redistribution by the government supports individuals who are unable to live independently.
The government offers various types of assistance to citizens, including social security, which is a transfer payment without requiring any reciprocation. On the other hand, transfers in kind, such as food stamps or subsidized housing, are also provided. Additionally, publicly subsidized healthcare options like Medicare and Beamer are available. Lastly, the government addresses economic aspects of public education, even though it primarily falls under the responsibility of state and local governments.
The government allocates over $900 billion towards education, which is crucial in supporting public schools and government grants. While all of the government’s functions hold significance, I consider the provision of a legal system to be the most fundamental. Our country’s legal system serves as the bedrock for all other operations and would crumble without it. It has brought organization to the economy and ensures its functionality through the establishment of property rights for businesses and the enforcement of laws and regulations by legal institutions.
