This isn’t the gotcha that you think it is. Inflation is kept at a positive number on purpose. Deflation causes a self-reinforcing spiral that brings everyone’s wealth down. If inflation is too high that’s a problem too, but it’s less of a problem than deflation.
… With that said, the huge amount that prices have gone up recently is caused by corporate profiteering, which is a serious issue that needs to be addressed.
The corporations are absolutely aware that people have stopped being price conscious.
I understand everyone who can afford a $6 case of coca cola can also afford a $12 case. At some point you have to just choose not to buy it, or the price will just keep rising.
I mean, you are the one making the logical fallacy of assuming they are defending the exact opposite… They’re basically just saying, “inflation bad”, and you come in and say, “deflation bad, too!”.
OK? They weren’t defending deflation? You even admit inflation has been out of hand lately…
Why does deflation bring your wealth down? If I saved miney in a deflationary period my purchasing power would go up. Deflation means the amount of goods you can buy with the same currency increases over time, inflation means the amount of goods you can buy over time goes down. So actually deflation makes your wealth go up it seems to me.
It’s good for you in the very short term, but bad quickly after that. It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less, and businesses bring in less and less money, so they lower prices more to try to entice you to buy, but the dropping prices only make you want to wait to buy even longer, this keeps spiraling downward and businesses keep bringing in less and less money, and so very soon they have to start firing people, and then more and more companies wind up out of business, causing more and more unemployment, and on and on and on, for everyone involved it all goes very bad.
It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less
This is the part people always lose me when explaining deflation is bad. Why would I suddenly be holding on to cash just because it’s “worth more”? Why would I be buying way LESS than I do now? I would still have bills to pay, I’d still have groceries I need to buy, and since all of that would be cheaper I might even have enough left after to actually buy things I want rather than need. Maybe I could actually afford to eat out every now and then, unlike now. Maybe I could actually afford to support the game developers I like instead of pirating everything. The average person doesn’t have the luxury of hoarding money, if we were in a deflationary period they’d be spending just as much money as before, they’d just get more in return for it. Even in the scenario that I do save some of it, it would be for the purpose of saving up for a big purchase like replacing my shitty car, which isn’t an option at all atm.
No, deflation by itself is good for the average person. It’s the outside factor of billionaires and corporations trying to maximize every last cent of profit that makes deflation a bad thing… and what do you know, it’s the same billionaires and corporations throwing inflation into over drive with their excessive price gouging.
I don’t know maybe it’s just me, but it sure seems like neither deflation nor inflation are the problem here. Both situations have their own unique challenges, but the thing making either a totally dire situation is the greedy billionaires and corporations. We should do something about that.
Entertain for a minute the though of a world with absolutely no consumerism or financial elites where no-one ever buys anything unnecessary or made of plastic.
In a deflationary scenario, everybody holds on to every dollar they make which they don’t have to spend on nevessities. Savings account are worse than the underside of the mattress, since deflation means negative interest rates by definition.
So where do you find the money to finance medical research, new roads, or anything that would return a future net benefit to society? Money under a mattress serves no purpose to society whatsoever.
This isn’t the gotcha that you think it is. Inflation is kept at a positive number on purpose. Deflation causes a self-reinforcing spiral that brings everyone’s wealth down. If inflation is too high that’s a problem too, but it’s less of a problem than deflation.
… With that said, the huge amount that prices have gone up recently is caused by corporate profiteering, which is a serious issue that needs to be addressed.
A sane economic take on lemmy?! Blasphemy.
I’ll add this; Stop buying shit. I’m not talking rent and food. I’m talking “consumer confidence” stuff. If you don’t need it to live, stop.
Example; Ammo got wildly overpriced. So we stopped buying. Like magic, prices tanked! Ain’t that crazy?
Of course that’s stupid oversimplified, but the basic idea is sound.
Locally, people were bitching about Taco Bell’s quality. OK. Stop buying Taco Bell. They’ll either crash (that store) or correct. Win-win.
I would love a legislative way to stop corporations from wildly profiteering off our asses, but I don’t know what that looks like.
The corporations are absolutely aware that people have stopped being price conscious.
I understand everyone who can afford a $6 case of coca cola can also afford a $12 case. At some point you have to just choose not to buy it, or the price will just keep rising.
You spelled “corporate market manipulation” wrong.
I mean, you are the one making the logical fallacy of assuming they are defending the exact opposite… They’re basically just saying, “inflation bad”, and you come in and say, “deflation bad, too!”.
OK? They weren’t defending deflation? You even admit inflation has been out of hand lately…
Why does deflation bring your wealth down? If I saved miney in a deflationary period my purchasing power would go up. Deflation means the amount of goods you can buy with the same currency increases over time, inflation means the amount of goods you can buy over time goes down. So actually deflation makes your wealth go up it seems to me.
It’s good for you in the very short term, but bad quickly after that. It makes everyone want to hold onto their cash because your cash becomes more and more valuable the longer you hold on to it. So people start buying way less, and businesses bring in less and less money, so they lower prices more to try to entice you to buy, but the dropping prices only make you want to wait to buy even longer, this keeps spiraling downward and businesses keep bringing in less and less money, and so very soon they have to start firing people, and then more and more companies wind up out of business, causing more and more unemployment, and on and on and on, for everyone involved it all goes very bad.
https://www.forbes.com/advisor/investing/what-is-deflation/
This is the part people always lose me when explaining deflation is bad. Why would I suddenly be holding on to cash just because it’s “worth more”? Why would I be buying way LESS than I do now? I would still have bills to pay, I’d still have groceries I need to buy, and since all of that would be cheaper I might even have enough left after to actually buy things I want rather than need. Maybe I could actually afford to eat out every now and then, unlike now. Maybe I could actually afford to support the game developers I like instead of pirating everything. The average person doesn’t have the luxury of hoarding money, if we were in a deflationary period they’d be spending just as much money as before, they’d just get more in return for it. Even in the scenario that I do save some of it, it would be for the purpose of saving up for a big purchase like replacing my shitty car, which isn’t an option at all atm.
No, deflation by itself is good for the average person. It’s the outside factor of billionaires and corporations trying to maximize every last cent of profit that makes deflation a bad thing… and what do you know, it’s the same billionaires and corporations throwing inflation into over drive with their excessive price gouging.
I don’t know maybe it’s just me, but it sure seems like neither deflation nor inflation are the problem here. Both situations have their own unique challenges, but the thing making either a totally dire situation is the greedy billionaires and corporations. We should do something about that.
Your problem is with consumerism.
Entertain for a minute the though of a world with absolutely no consumerism or financial elites where no-one ever buys anything unnecessary or made of plastic.
In a deflationary scenario, everybody holds on to every dollar they make which they don’t have to spend on nevessities. Savings account are worse than the underside of the mattress, since deflation means negative interest rates by definition.
So where do you find the money to finance medical research, new roads, or anything that would return a future net benefit to society? Money under a mattress serves no purpose to society whatsoever.
deleted by creator
Get your reason outta here and support a centralized economy like the rest of us!