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 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.