The role of governments in the economy is one of the most debated issues in economics. Similarly, one of the most enduring debates of U.S. economic history focuses on the role of government in the economy. On the one hand, it is argued that government regulation of the economy is too little and too late. On the other hand, there is also a claim that the U.S. economy is no longer a free market due to too many regulations.
Moreover, the causes of economic and financial crises have been parts of the larger debate on the role of the government in the economy. Some argue that the accumulation of incorrect policies and lack of effective policies led to the recent and other economic and financial turmoil (crises). Accordingly, the failures of the main entities that manage our economy, which are the Congress, the executive branch of the Federal government represented by the Treasury Department, and the Federal Reserve System, lead to economic and financial crises. The other side claims that it's the lack of regulations that lead to economic and financial crises.
What are the roles of government in the market economy? Based the current economic conditions, to what extent should the government intervene in the market economy?
What are the justifications given in favor of more government involvement in the market economy?
What are the reasons given in favor of less government involvement in the market economy?