There are two basic Views on the role of Government and the economy. One Group states that Government should be the leader of the economy, funding the development of economic components requiring huge Research Costs, presenting Stimulus to expand the economy, generate Inflation at controlled rates, and provide Welfare subsidies. The alternate View is that the economy should be a self-regulating mechanism operated under free market conditions, with Government intervention only where there is no other alternative. Paul Krugman holds the former belief, I hold the latter View. The first direction assumes greater Care for the Participants through Government operations, the later policy assumes that Government will crush the natural curative of a free market system. In truth, probably both belief systems operate poorly if ideation brings a stiffness to economic policy.
Paul Krugman believes that Government should flow in whenever there is any assumed failure in the economy, setting a Standard of performance. He would guarantee that a perceived economic benefit is never lost, assuming that intelligent human expression can define economic benefit, even though humanity has great difficulty in prediction. His proscription will always withdraw Investment Capital from the economy, whether it is achieved by Taxation or Borrowing with Intent to never repay; it being fashionable to assume economic growth must be accompanied with growth of Debt. Supporters of this View assert that economic Participants must have some Protection from natural operative behavior of free market systems, and there is superficial assertion of Benefit for the Poor. The greatest danger with this View may be the advocated expansion of Government intervention, which has no history of any decline after economic recovery.
The contradictory View held by myself believes that the Government robs the economy of vital Investment opportunities through Resource overuse, builds a economic drain through the creation of an Interest draft upon a huge capital Debt, inflates the economic influence of economic sectors and assignments, and shows no real betterment of the economic positions of the Poor; because of the natural inflation in those Services which are Government-funded. I am not an advocate of a Return to the Robber Baron Era before the Progressive Movement–the greatest Contrast to current Socialism–but Government intervention should be adopted carefully and solely for defined purpose; with no attempt to directly intervene in economic performance. The only Safety I can find is that the economy is a huge animal, whose Instincts are far beyond the capacity of mere Mortals to corral, and possessed with an innate sense of survival which humanity cannot curtail. lgl