Government involvement can greatly influence how well the economy grows, in both good and bad ways.

How Government Help Can Boost Economic Growth:

1. Building Useful Infrastructure:

   • When the government builds things like roads, bridges, and schools, it makes it easier for businesses to operate. For example, a study showed that if the government increases spending on public projects by 1%, it could raise the economy's overall output, called GDP, by 0.4%.

2. Keeping Markets Fair:

   • Rules and regulations can stop one company from dominating, ensuring that many businesses can compete. Research shows that when there’s more competition, prices can drop by as much as 30%.

3. Providing Safety Nets:

   • Programs that help people during tough times, like unemployment benefits, can keep people spending money, which helps the economy grow. Studies indicate that for every dollar spent on unemployment benefits, the economy could see a boost of $1.50.

How Government Help Can Hurt Economic Growth:

1. Too Many Rules:

   • Having too many regulations can make it costly for businesses to operate. Experts estimate that these federal rules cost businesses around $1.9 trillion every year.

2. High Taxes:

   • When taxes are very high, businesses may hesitate to invest. Research shows that corporate tax rates higher than 25% could lower GDP by 1.4%.

3. Wasting Resources:

   • When the government spends money inefficiently, it can lead to wasted resources. This mismanagement can hurt the overall economy, with studies suggesting that poor decisions may cost up to 15% of the potential GDP.