Saturday, April 14, 2012

Government interference effects the market.

Anytime the government attempts to control the market, it creates effects that would not have happened it the government had left the market to itself. Therefore, the actions of government will determine who profits and who loses.

For instance, the government mandates seat belts in every car. The seat belt manufacturers made more profits. The auto manufacturers may have to install seat belts at below cost to remain competitive, so they may suffer a loss.

In today's economic condition, the government should reduce the red tape, eliminate the restrictive regulations, and lower the cost of starting and running a business.

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