Some economists argue that the government intervention makes the economic outcome even worse. Some argue that there are important economic roles of the government.
I agree that it is a little of both. Sometimes the government has to step in and take charge. If they didn't, the system would crumble. Certainly, the government needs to regulate many aspects of business and economic practice. The system couldn't function if there wasn't a governing body in charge. At the same time, the government can easily overstep its bounds. They can do too much or too little. Sometimes the economic changes become political ploys rather than what is best for the citizens. Whether the government is good or bad really has to be looked at on a case by case basis rather than as a whole.
On balance, the government does more good than bad. Yes, government does get in the way sometimes. However, there are many things we cannot do without government. We need a leader. We need a military. We need roads, bridges, schools, hospitals and infrastructure. We need government.
Whether it's good or bad depends entirely on what the government does. This in turn depends on individuals, such as the members of the Federal Reserve and the Fed chairman. They exercise a certain amount of control over the flow of money in our economic system. There is a certain amount of guesswork involved in making these decisions, so sometimes it works out, and sometimes it doesn't.
It's surely some of each. When the government intervenes in necessary ways, it can do a lot of good. For example, governmental action to provide public goods is essential and beneficial. But when the government becomes overly intrusive, it can do harm. An example of this is our convoluted tax system that makes it easy to avoid taxes and which gives tax breaks to industries with the best lobbyists. The problem, of course, is in determining which government intervention is necessary and which is overly intrusive.