Government Should or Should Not Produce Goods and Services Term Paper

government should be in the business of producing goods and services.

Should the Government Produce Goods and Services?

In capitalism, it is normally the private sector that produces goods and services for the consumption of the public. The natural forces of supply and demand are supposed to work together to show the private sector what it should and should not produce, as well as how much to charge for it. Ideally, the government should stay out of the production of goods and services as much as possible, because the interference of the government could affect the delicate balance of supply and demand in a way that could potentially throw the entire economy into chaos. However, the government in the United States has lately been participating in the production of goods and services more and more, and the potential consequences to our capitalist economy are dire. This paper examines whether or not the government should be in the business of producing goods and services.In a capitalist economy, supply and demand are intimately intertwined. If the public wants something and supplies of it are limited, merchants can charge a high price for these goods and services. However, if the public wants something and there is lots of it to be had, merchants are not able to charge as much for it, as consumers can easily get the product someplace else that doesn't charge as much. As can be seen, the cycle of supply and demand affects prices in a very direct way. If demand for something drops, prices for it drop; if there is a large supply of something with a small demand, prices drop even further.

This is a natural cycle that ebbs….....