Slow economy due to not enough government action?

Slow economy due to not enough government action? September 16, 2016

A report from the Harvard business school argues that the reason the economy is growing so slowly is because of government inaction.  The government has been in a state of gridlock, so that the government can’t do what it needs to in order to make the economy grow.

Read the reasoning, after the jump.  This would be the Democratic diagnosis, as opposed to the usual Republican diagnosis that the government is holding the economy back.  Here, “regulation” is listed as one of the good things government does for the economy.  Whereas free marketers believe government regulation prevents economic growth.

Who makes the best case?

 From Report: U.S. government inaction is hampering economic growth – Chicago Tribune:

As the U.S. economy enters its eighth year of its recovery from the Great Recession, one major factor is slowing its growth: Government gridlock.

That finding emerges from a report by Harvard Business School being officially released Thursday. The report concludes that the tepid pace of the recovery increasingly reflects the inability of President Barack Obama and the Republican-led Congress to reach agreement on programs to bolster U.S. competiveness worldwide.

Prosperity has become more concentrated among fewer Americans, and the nation’s competitive edge is slipping as factors that have helped drive growth in the past are viewed as worsening. The U.S. political system, tax code, health care system, public schools, regulation and infrastructure are now all viewed as weaknesses for the economy, according to surveys of Harvard Business School alumni, students and the public compiled in the annual report .

“We have reached the conclusion that the paralysis in the U.S. political system is one of the gravest threats to our economic competitiveness,” said Jan Rivkin, a professor of business administration and co-author of the report.

The report defines competitiveness as being characteristic of an economy that enables companies to succeed in domestic and international markets while raising living standards for average people. One challenge is that while average Americans depend on education, roadways, public transit and health care to thrive, the survey found those parts of the economy to be weakening.

 From Report: U.S. government inaction is hampering economic growth – Chicago Tribune:

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