It All Makes Sense Now

The blog of Mats Gefvert.

Just Like Riding a Bike

Posted 5/3/2019 in Reflections

I've always felt like national economy is kind of like riding a bike.

Remember back when people didn't have LED's or batteries, but just the plain old dynamo, that you put against the wheel, and the faster you went, the brighter the lights got?

Just like a wheel, the national economy spins around. Goods and services are being produced and consumed, and the money that pays for it is constantly shuffled around, from person to person - just like a big bike wheel. The faster it goes, the richer we all become. The slower it goes, the poorer we are. (This may be slightly oversimplified, but bear with me.)

Now, some bright person comes up with the idea that it would be beneficial to everyone - you know, the country riding on the bike - if we could add a little dynamo and then have bright lights illuminating the road ahead. And what a great idea! Bright, shining light piercing the darkness!

Of course, it gets a little harder to ride the bike with the dynamo. We have to push a little harder, and the bike runs a little bit slower.

But the concept is so brilliant that we quickly come up with more things we can run off of the dynamo. Healthcare, social security, funding police and military forces, public schools, free tuition for universities... the list goes on and on; and it's so great because we all contribute to it and in return get all of these very useful public services.

Only the problem is that now it's really, really heavy to push the bike forward. Some people give up altogether and quit pedaling, which causes the bike to go even slower. And now the people pushing on the pedals get quite upset and become rather loud in their criticism, suggesting that maybe we could get rid of maybe one or two public services, so the dynamo will require a little less speed and the bike can run a little faster (and easier!).

Those loud people are quickly silenced and shamed, since who wants to get rid of all these public services benefiting so many? Keep pedaling, the downhill is coming, people shout.

And the downhill comes, and the bike flies along. Everyone is happy, the economy is doing great, even more public services are added. Phones, phones for everyone! Free healthcare, not just subsidized! Some people even float the idea of a universal "citizen salary" that is paid to everyone whether they work or not. Some people jump on it and stop pedaling. It's going downhill anyway, why bother?

But the downhill slope eventually ends, the bike levels out, and the uphill comes along - caused by financial turmoil in Greece or Japan - and suddenly the power nearly goes out; the light is reduced to a dim flicker, social services are left floundering, military and police forces are reduced to a bare minimum. Criminality grows. Poverty strikes. Protests are forming, both by those who now are practically killing themselves trying to push the pedals, and those desperately relying on these now largely defunct social services. The bike, due to the slow speed, becomes increasingly unstable.

Pray that the wheel never actually stops, for that is where coups, revolutions and civil war happens. Instead, pray that we have the foresight to minimize public spending where necessary in time, trim government programs, and encourage self-reliance instead of government dependence. And let's not forget the regular people (taxpayers) who day by day push the bike forward, in rain or sunshine, without any thanks at all.

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Well put, although as you know, there are many who would contend that minimizing public spending in time of crisis (specifically, in time of mass unemployment) is counter-productive.
Doug1943 @ 7/14/2019