The core of the problem is that deflation encourages and enables wealth hoarding. The rich get richer by doing nothing but sitting on the wealth they already have.
Exactly, which is why poor people go bankrupt during deflation, while the rich can just save their money and get richer and richer without even taking risks or investing (no investment, no jobs)
There is a balance though or else the system feedback breaks the economy. Too much deflation and the “progress” stops because it starts making more and more sense for people to hold off on spending their money as much as they can. As an extreme example, if you know you can buy twice as much of something for the same dollar tomorrow, you must really need that thing right now to justify not waiting for a day. Scale that behavior across the entire population and it can start producing real problems.
It would break the economy if people stopped buying shit they didn’t need. I really wish these numbers didn’t correlate to whether or not people had food or housing or healthcare, otherwise that sounds like a wonderful way to slow the erosion of the natural world at the hands of overconsumption
Money buying more goods/services than it did 2 years ago is called “progress” and is literally the entire point of human civilization…
Exactly. Nobody is gonna say “I won’t buy food today because it will be cheaper tomorrow.” A man’s gotta eat.
it will change what you eat and how you eat and how frequently you do it.
The core of the problem is that deflation encourages and enables wealth hoarding. The rich get richer by doing nothing but sitting on the wealth they already have.
Got some bad news for you, inflation does this too given that the rich have access to investment vehicles that the poor don’t.
I would argue this is better for poor people, cause they can’t just keep all their money as investments
Exactly, which is why poor people go bankrupt during deflation, while the rich can just save their money and get richer and richer without even taking risks or investing (no investment, no jobs)
There is a balance though or else the system feedback breaks the economy. Too much deflation and the “progress” stops because it starts making more and more sense for people to hold off on spending their money as much as they can. As an extreme example, if you know you can buy twice as much of something for the same dollar tomorrow, you must really need that thing right now to justify not waiting for a day. Scale that behavior across the entire population and it can start producing real problems.
It would break the economy if people stopped buying shit they didn’t need. I really wish these numbers didn’t correlate to whether or not people had food or housing or healthcare, otherwise that sounds like a wonderful way to slow the erosion of the natural world at the hands of overconsumption
Money being worth more than it was 2 years ago also means any debt you carry is suddenly worth more than it was when you borrowed it…