Brave New World in the United States – Government dreams vs. the reality of crisis

Dóra Győrffy

Public Finance Quarterly, 2009, vol. 54, issue 2-3, 327-347

Abstract: In the wake of the subprime crisis, the emgering dominant view became that the free market model has failed and governments must take a more active role than before in regulating the market. This article attempts to refine this view by pointing out that a decisive liability lies with the US government for pursuing a vote maximization policy behind the false illusion of technological development and generating unrealistic market expectations regarding the magnitude of risks taken. On the one hand, these failures must be a warning sign for all who seek to rely exclusively on increased government interference and on putting the markets under control in resolving the crisis. On the other hand, they also underline the fact that no technological innovation can replace financial sustainability in any economic policy.

Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:pfq:journl:v:54:y:2009:i:2-3:p:327-347

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