To alleviate widespread unemployment during the Great Depression of the 1930s, the federal government under President Franklin D. Roosevelt embarked on the first large-scale intervention into the private economy with the New Deal and its public-jobs programs. The success of the New Deal at easing unemployment remains the subject of debate, but Roosevelt's intervention established a new role for government as overseer of the economy and promoter of full employment.

Since Roosevelt's time, government has expanded its reach into the private economy with welfare and job training programs for the unemployed and minimum wage legislation. Critics of government spending to reduce unemployment contend that such policies siphon capital from the private economy through high taxes and other regulatory costs. In addition, say critics, such policies drain labor from the private sector by placing people in inefficient jobs for which...