A given amount of time and labor producing more and being able to get you more is progress.
Deflation brings a host of problems - but among them are it encourages hoarding (not saving), and the fact that it makes previous debts more and more costly over time.
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)
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.
inflation does this too given that the rich have access to investment vehicles that the poor don’t
This is true with the way that things currently are.
In theory, investing is participating in the economy, and functionally better (for everyone else) than simply keeping money in a static account (or just keeping it under your mattress). In a deflationary economy, everything beyond basic needs grinds to a halt because spending money is disadvantaged. This fucks over the poor who have to spend most of their money on basic needs, while the wealthy sit on their hoards like dragons.
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…
no - money is the means by which value is traded.
A given amount of time and labor producing more and being able to get you more is progress.
Deflation brings a host of problems - but among them are it encourages hoarding (not saving), and the fact that it makes previous debts more and more costly over time.
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.
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)
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
This is true with the way that things currently are.
In theory, investing is participating in the economy, and functionally better (for everyone else) than simply keeping money in a static account (or just keeping it under your mattress). In a deflationary economy, everything beyond basic needs grinds to a halt because spending money is disadvantaged. This fucks over the poor who have to spend most of their money on basic needs, while the wealthy sit on their hoards like dragons.
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…
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