Is it possible, or even desirable to run a government like a business?

Many politicians promise that, if elected, they will "run government like a private business". Is this possible, or even desirable? Government is usually not very good at doing what private businesses do, but then that isn't the purpose of government.
Business can be basically defined as:

• An occupation, profession, or trade: His business is poultry farming.
• The purchase and sale of goods in an attempt to make a profit.
• A person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.

What Is The Purpose Of Government?

Government only exists for the benefit of society. They have no other goal. Societies choose to have governments because they can provide benefits to society that individuals cannot.

The concept of profit is meaningless in government. If you want to run a government like a business you would cut services and raise taxes; but what is the point of doing that?  The profit would just go back to the taxpayers.

There are some governments who try to produce a profit, but the profit is for the benefit of the government leaders. These governments are called dictatorships. Few people would choose to live under such a government.

Why Do Government Run Businesses Do So Poorly?

Critics of government are quick to point to the failure of government run businesses to make profits as evidence of incompetence. This is not always a fair criticism.

Why does a business become a government run business?
Often, governments take over a business because private owners could not make a profit with the business, but society still wanted or needed the benefits that the business provided. Usually government does not try to make a profit, since its goal is to provide a benefit to society. If a private owner could not make a profit, why would anyone fault a government because they did not make a profit?

Governments and Private Businesses Face Very Different Challenges

When times are good, private businesses face higher demand and more money comes in. With more work they need more workers, and they have the money to hire more people. When times are bad, demand falls and less money comes in. Private businesses have less work to do and less money to pay the workers, so they can lay-off of workers to maintain profits.
When times are good, government receives more money in taxes, but demand for government services goes down. With employment high, fewer people need the help that government provides. When times are bad, less money is coming in, but demand for government services goes up. With more people unemployed, more people turn to government for help. Governments must pay off debts and build up cash reserves when times were good, so they can help people when times are bad.
Relationship between Government and Business
The relationship between government and business is complex, with both positive and negative aspects in terms of what can be called the "public good." The notions of the public good change depending on a person's ideology. Thus an accurate and complete understanding of this relationship necessitates an examination of the three main theories of political economy.

Free Market

The first theory of political economy revolves closely around the idea of "laissez faire" capitalism. Translated effectively as "let it be," this system proposes that there be little or no formal relationship between business and government. Growing out of the theories of Adam Smith, the essentially free-market approach argues that the public good can be seen as synonymous with economic efficiency and gains in the standard of living for individuals. According to Smith, the "invisible hand" (the aggregate of undisturbed decisions by buyers and sellers in the open market) tends to produce better goods, at cheaper prices, for more people. These cheap, high-quality goods allow for a better standard of living through material abundance, utility and comfort.

Socialism

In response to inequalities inherent in a system of open competition, socialism proposes action to ensure economic equality for the entire population. Furthermore, Karl Marx argued that the essential structure of capitalism required that those who own the capital continually lower the wages of the working class. Additionally, Marx argued that free market capitalism was inherently dehumanizing and tended to force people into monotonous labor for the sake of producing massive quantities of goods in order to satisfy selfish profit motives. According to socialism, the public good is seen in terms of economic equality and of checking the exploitative power of business. Therefore, the only remedy would be for the government, on behalf of the people, to take control of business and direct what goods would be produced at what prices.

                  Third Approach

A third option in terms of political economy was proposed by the economist John Maynard Keynes. It was his contention that business fully controlled by government would inherently lead to inefficiency and a lowering of the standard of living. On the other hand, he also argued that a purely free market system would tend to undermine itself in the long run, and lead to an unstable social situation due to inequalities and contradictions. It was the role of the government to push the private sector into socially desired outcomes, but to leave it alone in terms of how those outcomes should be accomplished. For example, using monetary policy the government can increase the supply of credit in the market, creating incentive for investment over savings and thus "stimulating" the economy.

Many of Keynes's ideas featured prominently in the policies of the Roosevelt administration during the Depression of the 1930s. Government infrastructure projects and the "New Deal," for example, were seen as measures the government could take in order to stabilize the economy and promote new growth when systemic issues could not be resolved by the free market alone.

Current Relationship

Currently, most developed countries use a variation of Keynes's policies, allowing a large degree of private business while maintaining strict regulation of certain aspects of the economy through the government. Today's relationship between government and business is thus neither lassez faire nor socialist, but rather a combination of both, essentially what is called a "mixed economy."