Conservatives and liberals offer different views regarding the role of government in the current financial crisis. Conservatives contend that government involvement in the economy has contributed to deficit spending, over-regulation and high taxes; while liberals contend that deregulation or lack of government intervention is the leading cause of the current fiscal crisis. Given the difference between the two camps, defining/understanding government’s role in the economy is an important step in finding a solution to the current crisis.
Read the articles by Gordon and Blinder and watch the interview with Martin Feldstein and Joseph Stiglitz on Charlie Rose. What can you infer about what the writers and the interviewees think about government’s role? How do Stiglitz’ and Feldstein’s attitudes toward Obama’s fiscal stimulus plan reflect their conception of the proper role of government in the economy? Where would you classify each one in terms of the three paradigms discussed in class?
