The flywheel in internal combustion engines stores part of the energy supplied in the power strokes of the pistons and returns it during other strokes. It smooths out the inherent jerkiness of the pistons and delivers power to the wheels smoothly. By analogy, economic “flywheels” can help stabilize an economy, minimizing pain caused by recessions.
Social Security, for example, acts like a flywheel, providing recipients with dependable incomes even during recessions. Social Security benefits differ from wages, which disappear for people losing their jobs, and dividends, reduced or eliminated when a company faces hard times.
Social Security’s income dependability is extremely […]
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