No matter how people came to America, they enjoyed America’s ultimate advantage: the business opportunities created by free markets, and the quality of life provided by the government.

Global_Lightbulbs_SmallOf all America’s lasting advantages, one stands out: the right balance between markets and government, the deployment of each institution in areas of the economy it excels–releasing the ingenuity and creativity of the American people for wealth creation and their compassion for the commons.

In the last decade, this delicate balance between markets and government has been compromised, because of the pursuit of socialist agendas that expanded the role of government in the wrong areas of society, undermining economic growth; and feeding a vicious circle of ever-higher government deficits and ever lower growth—the root cause of soaring national debt.

As I did write in Barron’s, free markets and governments have their own successes and failures in advancing economic and social prosperity. Free markets excel in the production of private goods and services, in the discovery and exploitation of genuine business opportunities, creating wealth in the process. But free markets are inadequate or fail altogether in the allocation of public goods, in addressing systemic and catastrophic risks and economic externalities. Governments excel in creating a “regime” that makes free markets functional, in defining and enforcing property rights and contracts, in allocating public goods, and in dealing with economic externalities and systemic and catastrophic risks. But governments fail in dealing with bureaucracy, corruption, and the inefficient an ineffective management of the agencies that perform these functions.

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Source: Panos Mourdoukoutas | Forbes