The economy is like a machine that should always hum smoothly along, and whenever something goes wrong, like a recession or inflation, it’s the government’s job to get under the hood and fix it, right?
Wrong, says Steve Forbes, best-selling author and Editor-in-Chief of Forbes Magazine. In this week’s video, Forbes explains that the “machine” model of the economy is not only inaccurate; it’s harmful, because it fails to take into account the immense complexities of the free marketplace, which is largely self-correcting.
By interfering with the natural ups and downs of that marketplace through monetary policy or cumbersome regulations, the government often lengthens or even causes economic downturns and slows recovery, as it did during the Great Depression and the recent recession. So what should the government do to help the economy? Watch and find out.