That's not government's role unless you're in Soviet Russia. The free market drives more innovation that government ever has. The Lada and the Yugo are great examples of what happens when central planners try to run things. Besides, if people aren't going to profit from their hard work, what's the incentive for hard work? I don't write code everyday for the good of humanity, I do it to try and build something someone wants to buy so I can improve my lot in life. Besides, if companies don't profit, they won't do and then you have a downward economic spiral of decreasing tax revenues and ever increasing tax rates to fund the government's work which then drives even less economic activity because the incentive is reduced.
The role of government is to protect life, freedom and property. As soon as the government gets involved in microeconomic transactions, the efficiency declines. Comparing the US Postal Servie and Amtrack to Southwest Airlines and FedEx illustrates this perfectly. The government should regulate markets only as much as necessary to ensure that the markets function. They shouldn't be running the markets themselves.
The lack of tort reform is one of the key drivers to the insane cost of drugs and medical care. When a drug company has multi-million dollar exposure for every drug they produce, it's going to raise the cost. OB-GYN docs pay several hundred thousand dollars per year in malpractice insurance because one mistake has them on the hook for multi-million dollar punitive judgements.
Government should be a referee, not a player. It should provide a safety net from complete destitution, but not serve as an insurance policy against failure. The GM bailout is a great example of what government should not be doing.
When the government starts meddling in private business (i.e. pouring money into it,) it distorts the market and makes it much harder for innovative new players to enter the market. The Tucker car from the 1950s is a perfect illustration. The big three in Detroit threw around political muscle to effectively shut down a car company that built safer cars. If government had stayed out, we would have had seat belts and pop-out windshields years earlier.
"I'm from the government and I'm here to help" are still the scariest words one can hear in America.