- Describe the role of government in a market economy
- Discuss how property rights and other basic public goods are critical for a market economy
- Review the federal government budget, highlighting the major expenditures and revenue sources, as well as topics of concern for future generations
Reading For This Module:
- Taxation by Joseph J. Minarik
- Social Security by Thomas R. Saving
- Fiscal Policy by David N. Weil
Policy is usually a bit more complicated than what you see on the news…
The government plays a major role in the economy. In this module, we focus on some of the basic functions of government (e.g. property rights) and describe what a federal budget typically looks like in the U.S..
Dr. Wentland Lecture: Government and the Economy (video)
These videos cover basic functions of the government’s role in the economy. What do they do, why is it important, and where exactly does the money go (or come from)?…..watch for property rights as a basis for markets and what that allows us to do, as well as some brief discussion of the consequences of too much or too little government intervention.
Part 1 (video) (13:26)
Part 2 (video) (29:18)
The Rule of Law: Why is the rule of law crucial for a successful economy? (video) (03:50)
Hernando de Soto, Peruvian economist, talks about the importance of the rule of law in building a successful economy. What happens if the rule of law is not obeyed? (- from video description)
The Debt Limit (3:48)
From time to time, Congress and the President fight about the “debt limit.” What is that all about?
A Policy Most Economists Would Support… (4:30)
For many policies, you can find a lot of economists on both sides of the issue. For this one, they are disproportionately on one side. Can you guess which side?
Government policy can get very complex, where there are often opposing (valid) arguments on both sides of many issues. In this module, we just cover some of the basic functions of government, without venturing too far into many of the more heated debates. However, with a solid understanding of the basics, you will be a much more informed voter and citizen.