Economy Car Analogy

No doubt you’ve heard car references to “driving the economy off a cliff,” or “driving into a ditch.” Well, here’s my analogy.

You could think of our economy like a car with two drivers – government and private industry. The government controls the brake pedal. Private industry controls the accelerator. Both can see where the car is going, and both control the steering wheel; however, the government is stronger, so the car ultimately goes where the government wants it to go, unless they graciously allow private industry to drive.

When private industry sees that the car is headed in the wrong direction, it takes its foot off the gas, and the economy slows down. Unemployment goes up, business slows down, spending slows, exports go down, and people tend to hang onto their money. No amount of pressing the brake pedal or turning the steering wheel will make the car go any faster. Eventually, the car will come to a halt, though with the economy, this can take years. That’s what’s happening now.

When private industry thinks the car is going in the right direction, it presses on the accelerator and the car picks up speed. Business is good, jobs are plentiful, exports are up, and life is good.

Since the government only controls the brakes, it can’t make the car speed up. Government can only slow it down. Government can create unemployment, destroy jobs, stop growth, and stop exports, but only private industry can make the economy speed up.

So, in my opinion, all the rhetoric in Washington about government creating jobs and stimulating the economy is just empty promises and rhetoric. We have ample evidence that it doesn’t work. The government’s foot is permanently on the brake – not the accelerator.

The only way government can help is to get its foot off the brake, let go of the wheel, and allow private industry to propel us to a recovery.