Car and Driver
I’ve been spending a lot of time behind the wheel lately (photo soon – I promise!), so my mind is running to automotive metaphors. Today while sitting in stop-and-go traffic listening to an NPR report on the battle over supplementary tax rebates for low-income workers, I suddenly had this vision of the national economy as a big SUV stalled on the roadside, with two sides debating the best way to get it moving again.
One approach favors tax cuts, the other side what amounts to more government spending on low-income families. Both of these approaches have their merits, depending on the circumstances.
Government spending is like low gear. Every turn of the engine translates to a turn of the axle: every dollar spent by the government lands directly in the US economy. It’s used to buy something from an American company, or goes into the pocket of an American worker. This offers great torque and acceleration, but quickly becomes a drag on performance. Use it too much and the engine will overheat (inflation), as we’ve seen in the past.
Tax cuts, on the other hand, are high gear. When the car is in motion, you don’t want the engine interfering too much – just enough to give it that little extra push on the freeway. Tax cuts are a good way to drop an economy already moving forward into maximum efficiency mode, save gas (resources) and reduce wear and tear on the machinery.
A functioning economy needs both gears from time to time, and it needs a driver who knows when to shift. Ideological disputes between liberals who want maximum government spending all the time and conservatives who want none ever are like two passengers arguing over which gear is better. The answer is, it depends on the circumstance.
Right now, we’re stopped on a hill and our friends in the Republican party think the best way to get things moving is to pop the clutch and put it straight into fifth, because, after all, low gears are for wimps and liberals.
And that, my friends, is why I drive an automatic.
8:56:36 PM 
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