Analysis: Is Government’s Role To Fix Economy?

WASHINGTON (AP) — The economy needs to be fixed. On this, Democrats and Republicans agree. They part ways over how to do it and, specifically, what role the federal government should play.

“Ultimately,” President Barack Obama tells Congress, “our recovery will be driven not by Washington, but by our businesses and our workers. But we can help.” His argument that government has a responsibility to do so probably doesn’t sit well with an America that’s down on Washington.

Texas Gov. Rick Perry, former Massachusetts Gov. Mitt Romney and other Republicans competing for his job take a different tack as they court a tea party-infused GOP electorate: The economy will thrive, they say, if Washington simply gets out of the way. As Perry puts it: “Smaller government, less spending, fewer regulations.”

At the heart of the 2012 presidential race is an issue as old as the country itself. Is it the federal government’s responsibility to address what ails the nation, in this case the economy? And if so, to what degree? What is the right balance?

History tells us that, try as we might, we may never answer those questions; we’ve been debating them ever since the Jeffersonians and the Federalists squabbled over states’ rights vs. a strong central government. In the end, the Constitution assigned certain powers to the federal government while reserving others to states.

But the tension in America between the purely local and a far-off central government has never gone away. Nor, perhaps, should it in an ever-evolving democracy.

These days, Republicans argue for a limited government, claiming that lower taxes and less regulation will encourage job creation. Democrats advocate a more robust government, one that provides more services, pours more money into the economy and, in Obama’s case, raises taxes on the nation’s highest earners.

“We’ve been in this pattern for decades. These are the terms of our politics probably for the next generation, too,” said Charles Kesler, who teaches government at Claremont McKenna College and edited “Saving the Revolution: The Federalist Papers and the American Founding.”

Given the scripts, the question that ultimately determines who wins the presidency might be this: What do Americans want from their government?

For many, the answer is difficult to articulate.

Larry Parkin, a conservative who hosts a discussion group on the Federalist Papers with the South Pinellas 9.12 Patriots in St. Petersburg, Fla., just started collecting Social Security, which he calls a contract with the government. The 65-year-old Coast Guard retiree expects the country to secure the borders and protect the nation. Beyond that, he says: “I expect them to be less intrusive than they are. I expect them to have a limited role.”

But he struggles to identify exactly where the line between too much and too little government lies.

Ask Ashley Stilos, a liberal in Fayetteville, Ark., the same question and she says one of the government’s roles is to take care of its people, adding: “Every individual should have the right to pursue happiness from an equal fighting ground, and that’s not the way it is in society.”

Is it the government’s job to make that playing field level? The 27-year-old university loan specialist says: “They have the power to make it more equal, and it’s their responsibility to do that.”

Americans’ views of government have shifted in recent years, according to an analysis of Associated Press exit polls.

In 1992, more than half of voters thought government was doing too many things better left to businesses and individuals. But by 2008, a majority, for the first time, wanted government to do more to solve the nation’s problems.

That didn’t last long after Obama took office. In quick fashion, he signed into law an economic stimulus plan, oversaw an auto-industry bailout and presided over the second installment of money to keep Wall Street afloat. A health care system overhaul came a year later.

By 2010, 56 percent of voters were back to saying that government was overreaching, while just 38 percent said government should be more active. It was the most government wary view among independents that the exit poll has recorded, with 65 percent saying government should do less, while 28 percent said it should do more.

Nowadays, people across the political spectrum seem to want very little from Washington.

A CNN/Opinion Research Corporation poll in June found that 63 percent of people think the government is doing too much, while 33 percent want it to do more. And the sentiments of independents, who typically decide close elections, generally mirrored Americans at large.

But all that could change quickly, especially if these tough times persist, with 9.1 percent unemployment, rampant foreclosures and fear of back-to-back recessions.

Against this backdrop, Obama is seeking re-election. And a 24-hour span last week showed the vastly different type of leader — and view of government — the nation will get if they choose a Republican over him.

No sooner did eight Republicans take the debate stage at the Ronald Reagan Presidential Library in Simi Valley, Calif., than did they rail against the federal government requiring states to act a certain way, lambast Washington overreach, and argue that fewer regulations and lower taxes would compel businesses to hire again.

“They’re looking for a president that will say we’re going to lower the tax burden on you and we’re going to lower the regulation impact on you, and free them to do what they do best: create jobs,” said Perry, who has staked his candidacy on a promise to make the federal government as inconsequential as possible to people’s lives.

He and the others were posturing before a GOP electorate shaped by the tea party, whose existence can be attributed in part to a disgust by citizens over the growth of government — and federal spending — under George W. Bush, a Republican, and Obama, a Democrat.

“I believe in a lot of what the tea party believes in,” Romney said. “The tea party believes that government’s too big, taxing too much, and that we ought to get to the work of getting Americans to work.”

Minnesota Rep. Michele Bachmann said Washington needs to stay out of education and health issues, claiming: “We have the best results when we have the private sector and when we have the family involved. We have the worst results when the federal government gets involved.” And Texas Rep. Ron Paul opposes the federal government from having any role that isn’t explicitly laid out in the Constitution.

One night later, Obama pressed Congress to immediately pass a $450 billion plan to create jobs and jolt the economy, arguing that government was at least partly responsible for fixing it, helping Americans who are hurting and upgrading the nation’s crumbling roads, bridges and schools.

“This task of making America more competitive for the long haul, that’s a job for all of us,” he said, adding: “For government and for private companies. For states and for local communities — and for every American citizen.”

He countered the pitch from conservatives and the tea party that heavily cutting government spending and eliminating a chunk of government regulations is the best solution to the economic woes, saying: “This larger notion that the only thing we can do to restore prosperity is just dismantle government, refund everybody’s money, and let everyone write their own rules, and tell everyone they’re on their own — that’s not who we are. That’s not the story of America.”

And he reached back to history to try to prove his point.

Obama argued that its workers and entrepreneurs made America’s economy great, the envy of the world. But he also noted that government was responsible for the Transcontinental Railroad, the National Academy of Sciences, the first land grant colleges, the G.I. Bill, the nation’s highway and air systems, the public school system, research that led to the Internet and the computer chip.

Americans will hear these competing visions of government for the next 14 months before casting a vote that will offer a glimpse into Americans views of the scope of government — a temporary clarity at best as the debate as old as our founding rages on.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Rico Suave

    Answer: No but they can sure mess it up pretty good if they try. And they have and are continuing to do so. $450 billion in new debt to “create” jobs??? We tried that a couple years ago and it barely created any. It mostly ended up being used as union payola for past votes. S&P said they downgraded us because of our out-of-control debt. So what do they do? Add more. Then they heap on more regulations, chase oil and coal energy away, throw money away on green jobs that go bankrupt with our cash.

    Leave it liberals. They think we can spend our way out of the recession they create. I wish Obama would just please stop trying to help.

    • Sam

      And leave it to conservatives to think we can cut our way out of a recession.

      Simply making tax cuts and reducing regulations doesn’t create more jobs. It doesn’t put more money in the economy. When big businesses get more income, the board of directors and CEO don’t say “We can spend more money.” They say “We’re making more money for our bonuses.”

      There needs to be a balance between intelligent spending and intelligent cutting.

      • Reasonable

        Wait, you want intelligence in a partisan political quagmire? C’mon Sam, that’s silly talk!

        Granted this is reducing the current problem to one of oversimplification, but the Fortune 500 companies are sitting on more cash than they ever have before and are still making profits. There will eventually come a time when holding that capital won’t do any good because there won’t be enough workers out there making purchases to continue the flow of cash through the economy.
        Consumers are holding back because they can’t afford to do anything else. Corporations are holding back because there aren’t enough consumers. Who will budge first?
        The problem with the prior stimulus spending is that it ended up in the middle. If you give cash to the consumers, they will buy things. If you give cash to the wealthy they will hold it because they’ve already purchased what they want. More purchasing = more demand = more manufacturing = more jobs = more purchasing = more demand, etc… It has to be from the bottom up and not from the top down.

    • StraycatStrut

      Its also a simple equasion. Political-in-power Liberals do not know Squat about business. Get them out of the way, and you will see a turn around. Over 2 years of Washington dominance, The Liberals in Washington only made things worse and claim “Bad Luck” (BO). I say let them ride Daytons bus to Canada for good on a 1 way trip.

  • Kendall

    Obama could help the economy by freezing Obamacare, Cap and Tax, back dooring card check, and opening up leases on oil drilling in the gulf, off california and alaska. Just get off the businesses back.

    • Tom

      @ Kendall:

      Apparently you didn’t see the article in the Huffington Post about a week ago. Private Sector business owners said that it ISN”T regulation that is holding them back from hiring!

  • Sue J

    NO!!!!! The government has never run a sucessful business, they just keep filling it with our MONEY!!!

    • Tom

      @ Sue J

      Were doing just as much complaining between 2000 -2006 as you are now?

      By the way IT IS the Gov’t who decides what bridges and roads need to repaired or rebuilt altogether NOT the private sector!

    • jimmy

      @Sue J

      “NO!!!!! The government has never run a sucessful business”

      By definition the government is not a business thank God. Why make such a stupid analysis?

  • sid

    Liberals believe government should provide a job, healthcare, and housing as a basic right as an american citizen. Conservatives believe government should provide the environment to allow its citizens to provide for themselves.

    • Tom

      @ Sid

      That would explain the WIDE income gap between the top 2% and the bottom 73%. That explains why “trickle down economics” has worked so well! That explains why the conservative believe you need to keep giving the top 2% huge tax cuts because maybe some day they will bring jobs back. That would explain why the GOP gave big business big tax breaks to ship jobs over seas. By the way how are those 3 Bush tax cuts working out for you? Where are the jobs from that? Since conservatives believe that tax cuts are the answer for everything there should NOT have been a deep recession.

      • tony

        The real cause of our economic slump isn’t too much government or too little government. It isn’t red tape, high taxes, low taxes, the growing divide between the rich and the poor, too much government debt, too little government debt, corporations, poor people, “greed,” “socialism,” China, Greece, or the legalization of gay marriage. It isn’t any of the things all the various nitwits say it is. “It’s the debt, stupid.” It’s the American peoples debt, at home. We have tens of millions who cannot repay their debts. But they are all trying to. That sucks huge amounts of money out of the economy. And that means these people cannot function properly as consumers or workers. That’s the reason people aren’t coming into your restaurant. It’s the reason people aren’t taking your yoga class. It’s the reason they haven’t hired you to redo the kitchen. And so tens or hundreds of millions of perfectly responsible business owners and employees are also suffering from this slump. That’s the reason we have a shortage of demand. That’s the reason no one is hiring.

    • Tom

      @ Sid

      Who do think runs Medicare? The Gov’t!

      Do you hear alot of seniors complaining their Medicare?

    • jimmy

      “Conservatives believe government should provide the environment to allow its citizens to provide for themselves.”

      Yea we saw that under the Bush Administration, No Thanks.

      • sid

        get a job, you might like it.

        • Jim

          The Republican answer to the country’s economic problems: “get a job, you might like it.”

          How anyone votes for these know-nothing “conservatives” is one of the great mysteries of the modern world.

        • jimmy

          I have a job and I’m collecting a public sector pension.

          Now why don’t you take your own advice.

  • Bill

    The government has been regulating the economy to avoid the natural peaks and valleys a capitalist economy should have. The problem is that when you regulate something to smooth it out you increase the time between the highs and lows but when they do occur they swing more wildly and last longer when compared to the uncontroled market. So now we’re experiencing a wild negative swing that wil last a while. The governments attempt to control the swings helped cause it, they should help fix it.

    • jimmy


      Could you please tell me when in history we had a uncontrolled market. Seems the closest we ever came is when Bush refused to regulate the banks. How did that work for us.

      • tony

        the 1930’s

        • jimmy


          Not true. If anything they added more regulation in the 30″s after the Republicans ran the economy into the ground

          • tony

            No, it’s True. The regulation came after the uncontrolled market. I was just responding to your intitial comment.

      • Harold

        that wasn’t bush. He tried to implement regulations at fannie and freddie in 2004 but was overruled by Frank, Dodd, and a demacratic congress. He was labled as trying to keep the poor people down when they were giving loans to people that could not afford them. Get your facts straight.

        • True American

          Bush in 2003 forced the retirement of the director of oversight of F&F. Also in 2003 F&F started taking sub prime loans for thew first time in history. Please explain to me why Bush did not name another director until 2006.

  • jimmy

    @Rico Suave

    “$450 billion in new debt to “create” jobs??? We tried that a couple years ago and it barely created any.”

    That’s not true it created a large number of jobs. The 610 hwy was extended for miles with that money which created hundreds of jobs. The 169 County Rd 81 interchange was funded with that money creating hundreds of jobs. perhaps if you look around you’ll see many projects that were created.

    “We tried that a couple years ago and it barely created any. It mostly ended up being used as union payola for past votes”

    That also is not true. It was the Governors of the states that picked the projects, I doubt that Perry was concerned about paying off the unions in Texas.

    “S&P said they downgraded us because of our out-of-control debt.”

    This is just a flat lie. What S&P said was they were downgrading because the debt was being used for political gain. They also said that the political climate in Washington was such that they couldn’t get anything done. That was a reference to the tea party members of congress and their my way or the highway attitude.

    Leave it to conservatives to start two wars, not win either one of them then refuse to pay for them.

    • dan

      And where are these guys working now that the construction projects are done? They are standing in the unemployment line. You see, Liberal efforts to get people back to work are short term money grabs. Small and large business are the ones that create long term job growth.

      • Jim

        “Small and large business” pay lower tax rates than they have in decades and are sitting on more cash than they have ever had, yet they are not hiring. Big business and the richest Americans have convinced Republicans that they need more, more, more money to “help” the economy, but look at the facts and you realize that it’s just greed. Giving tax breaks to a company does not make that company suddenly start hiring people. Once you’ve dispensed with that pipe dream, the entire Republican platform begins to look ridiculous.

        • dan

          @ Jim,

          So your plan is to take $1 govt dollar that was collected by tax and buy jobs to collect .15 cents in taxes back for each tax dollar spent?
          Doesnt make much sense.
          They are private business for a reason and they have all the rights in the world to sit on cash. That means they actually made a profit and have chosen to ride out the Lib govt hard times and wait for greener days to invest.
          Busineses dont need tax breaks, they need govt to get out of the way.

          • Jim

            That’s my plan? LOL. No. I’m not calling for increased taxes, I’m calling out Republicans for believing lowering taxes makes businesses start hiring people. That’s just not true.

            Of course they have every right to sit on their cash. That’s my point! Remember that the next time Rick Perry tells an interviewer that the answer to high unemployment is lowered taxes on businesses.

            “Busineses dont need tax breaks” = the antithesis of the entire GOP platform. Are you a Democrat then?

      • Tom

        @ dan

        Then what is your solution? Do nothing and wait for the private sector get us out of this mess. Well they created 17,000 jobs last month.

      • jimmy

        “And where are these guys working now that the construction projects are done?”

        Where did you get the idea that the projects are done?

    • Tom

      @ Jimmy

      Rico seems to forget one thing about half of the first stimulas went to tax cuts. The recession was already in FULL BLOOM before Obama took office. We were losing about 500,000 jobs a months BEFORE Obama took office. And Rico also seems to forget that the GOP was charge of things between 2000-2006. The conservatives do have selective memory. Conservatives make it sound like sound like Bush handed Obama a big surplus and eveythiing that Bush did was paid for.

      • Tom

        @ Jimmy

        I saw both guys from S&P say the samething on on tv.

      • StraycatStrut

        @Tom. Incorrect….. Obama…. your guy was in office as a Senator. Or is that Not a leadership position? He’s part of the problem. Did you forget that…. or pass on your Wheaties this AM’r?

  • Steve Cook Dr Brett Bolton

    It is definitely the governments job to fix the economy, in many way they are to blame for the mess we are in now! This should be a given, but the government has never really liked taking responsibility for its actions.My name is Steve Cook and I am a hair loss expert and I am here to help those with hair loss. Wish I could help the economy as well, unfortunately, my expertise only goes as far as hair restoration.

    • Redneck Purist

      You could probably get some business from Joe “hair plugs” Biden. You might even get some new stimulus cash.

  • Tom

    @ Rednick Puist

    Maybe Rush could use some “Hairplugs” to!

    • Jim


  • dan

    I guess after 3 years of blaming Bush and the election around the corner the Libs are looking for another excuse. The blame game hasnt worked nor have their Trillions of stimulus dollars so lets raise the question……Is its Govts role to fix the economy?

    • Jim

      I don’t believe that the government can fix the economy, but it sure can destroy it. Starting a trillion-dollar foreign war/quagmire that is still being fought ten years later while at the same time lowering taxes for the richest Americans is one good way to do it. George Bush is the worst president this country has ever had, and I’ll “blame” him and remind people of his failures for as long as I’m able.

      • dan

        While you live in your angry world keep in mind all those democrats who voted to start the trillion dollar war and lower taxes.
        I guess you missed Obamas Job Bill – He is lowering taxes on business!

        • Jim

          I’m still angry at George Bush, yes, as well as the many Democrats who voted for the war in Iraq. Anyone with morals and a brain should be.

          As for Obama’s job bill (which as I stated I think is a joke), I assume the part about lowering taxes is a compromise with “conservatives,” something I give him credit for being willing to do. But government can’t fix the economy or create jobs, so it’s all just political theater for rubes, in my opinion.

  • jordanj

    If they broke it, which they did, then they should fix it, even if they have to pull dollars from their entitlement.

    • common cents

      Like the FAB 12, that broke Social Security over 40 years with unfunded loans to buy votes (both left and right)? And their solution is to raise the retirement age, cut military spending, and increase the dollar limit on social security. This way they all can continue to buy votes and we the people (middle) pay for it once again. We need to stop these pigs from buying votes with our retirement.

  • Murph

    The completely sane thing to do is to fire them ALL and start over! One State = one vote!Look at the money that would be saved.Look at the degree of honesty and integrity that would be better assured! They are just no longer on the side of the people who make up a real democracy! They need to be sliced,diced and deminished,just like our hopes ,dreams and retirements have been! They liove to quote and twist the constitution .so let’s just ask them to restore it to where it was before they perverted it! Politicians need a shorter leash and SOON! They are ruining us beyond any nightmare imaginable!

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