At the heart of most debates in regard to policy there comes the issue of regulation vs the promotion of individual liberty. This issue was most highlighted in the recent financial crisis, however the debate permeates through every sphere of social, political and economic life. Most liberals would adhere to the notion that the law should be restrictive so as to protect individuals from themselves and keep order instilled. Most conservatives argue that the individual should be as free to do as he or she wishes and that the resulting inequality that may or may not happen will be effectively dealt with by the market. In the current understanding of the world, neither approach should be implemented absolutely, but rather an intricate blend and careful balance of the two policies must be carefully practiced.

The financial crisis brought on a near collapse of the entire economy due to the amount of exposure banks brought in from risky and aggressive investment practices. This brought in a new era of regulation to curtail these disastrous consequences. In this sense, regulation can be used for good. However, in other cases when regulation is superfluous, the denizens of a country are too restricted to make any decent moves and we start shifting into something close to a government-run state. In this sense, it can be as equally dangerous as the financial crisis due to a significant decrease in aggregate demand and supply by a lack of production incentives.

In essence, this is why government exists: not to promote the use of regulation but to find the right balance between regulation and freedom that is appropriate for the current era. In fact, when boiled down to their simplest elements, most policies that are unpopular sway too far to either side. During the financial crisis, the government along with the large financial institutions were blamed for the resulting meltdown due to a lack of regulation. During the periods before the Reagan administration, there was wide distraught over the restriction of personal liberties and as a result the government was once again blamed. A truly efficient and impressive government finds the balance and meets it every time.