GOVERNMENTS’ ROLES

Here’s issue #27 of my Policy and Politics Newsletter, written 4/22/12. After a bit of a hiatus from the newsletter while I was on vacation, I’m back with an issue that looks at the role of government in our economy and society.

Our federal and state governments play important roles in supporting people and our economy and providing opportunities both for individuals and companies. Although sometimes criticized for hindering personal or companies’ initiative, which does happen on occasion, for the most part governments do foster opportunity – and we need them to.

Government supports are sometimes criticized as “entitlements,” which has almost become pejorative in its use. The concern is that government support leads to individuals becoming dependent on it and hence lazy and lacking in initiative. However, the great, great majority of government supports – including, for example, support for education from birth through college – provide individuals opportunities to become productive members of society.

Interestingly, government supports for businesses are almost never referred to as entitlements, although some of them have been around for a long time. Furthermore, there are many examples of companies taking advantage of government supports, sometimes to engage in highly risky or other types of activities that they wouldn’t if they didn’t have – or believe they would have – government support. The recent bailouts of the financial and automotive industries, the subsidies for large agribusiness, and tax benefits for fossil fuel companies are all examples.

In addition, companies depend on government supported infrastructure in numerous ways, including:

  • Availability of productive workers based on publicly supported education and job training
  • Ability to get products to consumers through publicly funded transportation systems
  • Copyrights, patents, trademarks, and a legal system to protect companies’ intellectual properties and the profits they gain from them, as well as to maintain the overall legal infrastructure of contracts and laws
  • Support for innovation through government sponsored research and tax credits for research and development
  • A supportive financial system including direct financial support (such as Small Business Administration loans) and well-regulated markets through which investors feel confident in investing their money

Although business people tend to exalt the “free market,” this isn’t really what they want or what exists. What they want – and need to succeed – is a well-regulated and supported economy where productive workers and capital are readily available, where their ideas and innovations are protected, and where they can inform and deliver products to customers.

To create a productive workforce, government provides a range of essential supports to individuals and families. Although sometimes criticized as “entitlements,” these supports provide opportunity to individuals to realize their potential and become the productive workers employers need.

Our education system is probably the primary example. This includes not only K-12 schools but also support for higher education through public colleges and universities, loans and grants for student tuition, as well as grants to higher education for direct and research support. Early care and education – often referred to child care – is receiving growing attention as our knowledge of the importance of early brain development grows and the evidence accumulates that children who arrive at school unready are unlikely to succeed in school or in life. Government financial support and regulation to ensure that children receive safe, nurturing, stimulating, and educational experiences in early care and education are essential, especially for children from low income families.

Clearly, children who aren’t well nourished or healthy will struggle to learn and succeed whether they are newborns or teenagers. Government food programs (e.g., food stamps) and Medicaid (health insurance for poor children and their families) are essential to healthy brain development, school readiness and success, and ultimately becoming productive members of society.

There are many other examples of governments’ supportive roles that range from public libraries to support for seniors (i.e., Medicare and Social Security), not to mention police, fire, and water and sewer services.

In summary, government supports or “entitlements” exist for both individuals and companies. They are important to providing opportunity and maintaining a vibrant economy and society. Although some political rhetoric juxtaposes an entitlement society as the opposite of an opportunity society, that is not the case or the reality. As Renee Loth wrote in her Boston Globe column (3/3/12), “Far from being in opposition, entitlements and opportunity go together like milk and Cocoa Puffs.”

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