Government: Good or Bad?

[Politico]

I agree with Adam Smith: The proper role of government is to provide national defense, law/order, and basic infrastructure. Whenever possible, these should be provided at the local/state level rather than the federal level since there is more accountability with less centrality. From my perspective, the basic infrastructure provision should only be goods/services with large positive spillover effects that markets do not really provide well, if at all (e.g., public highways, some natural monopolies specifically in utilities, certain areas of scientific/technological research, etc.).

I believe the only goals of monetary policy should be price stability with an implicit nominal anchor of 2-3% targeted inflation, and ensuring the stability of the financial system. Fiscal policy can help stimulate demand, but it is hard to trust that politicians/bureaucrats will spend taxes and borrowed funds properly (i.e., on proper basic infrastructure projects along with national defense). There is a reason why most politicians/bureaucrats did not get their start in business (i.e., the private sector), so keep that in mind the next time somebody suggests giving them control over more and more resources (whether it is Newt Gingrich speaking on behalf of colonizing the moon and putting mirrors into outer space, or Bernie Sanders calling for the nationalization of something or other).

With regards to the "efficiency/equity trade-off," the larger the economic pie is the larger the slice each one of us can obtain. Furthermore, a growing economy is a positive-sum game: Everybody can gain more without it necessarily being at the expense of somebody else. In comparison, when you have a stagnant economy, perhaps in the case of excessive government interference in the economy in the name of "equity," the economy becomes a sort of zero-sum game: You can only gain more at the expense of somebody else. You have to consider the deadweight losses and perverse incentives incurred whenever you argue in favor of a "tax-and-spend" course of action.

Results matter. Good intentions do not matter if they lead to poor results.

[Politico]

As a liberal, I see government as a tool to be used when needed.

Whenever a liberal calls the government a tool, all I can think of is the following proverb: "If all you have is a hammer, everything looks like a nail."