Sunday, November 1, 2009

Why government intervention in the free market is bad

Excellent Video by Peter Schiff, talking about govt intervention in education




Across the sectors, we see lots of government intervention in the form of subsidies or regulations. Inevitably, prices will rise. If you understand the video, then this shouldn't be a problem to understand.

Several sectors without much government intervention sees prices going down. An example would be electronics.

Medical costs also rise all the time, precisely because the govt interfere. In a free market, costs won't be way inflated like it is now. That said, according to Schiff, there're still certain departments in the medical sectors that have costs going down. For eg, the Lasik eye surgery. Even though medical costs are going up, Lasik surgery costs go down because of lack of govt intervention.

Govt intervention distorts the economy, creating huge imbalances and wild prices.


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