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[–] SirKeyboardCommando 0 points 3 points (+3|-0) ago  (edited ago)

I don't know much about economy stuff, doesn't deflation mean your money is worth more today than it was yesterday? Doesn't that make it hard to get people to spend it? I've always been under the impression that deflation is bad and ideally you want a consistent very very small amount of inflation.

[–] [deleted] 0 points 4 points (+4|-0) ago 

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[–] SirKeyboardCommando 0 points 0 points (+0|-0) ago 

That's really interesting, thanks. I'll have to read into it some more.

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[–] fat_pony 1 points -1 points (+0|-1) ago 

Doesn't that make it hard to get people to spend it?

No. Think about this. That XBox or TV you really wanted was 500 dollars. But we just had some crazy deflation and now that TV is 450 dollars. Do you think that would entice you to spend money or save money? When the value of your money goes up, the cost of goods go down. Going to any store anywhere would prove to you how that concept gets you to spend money. It is called a sale.

I've always been under the impression that deflation is bad and ideally you want a consistent very very small amount of inflation.

Ask the next random person you meet what inflation is and what the inflation rate is. I have never had any success with this, people just have no clue what it is. So how could a mechanism that hardly anyone knows exists, let alone understands be good for the economy? Especially since knowing that your money decreases in value over time is supposed to be what gets you to spend, but since hardly anyone understands this, how could it possibly be increasing spending?

Inflation helps businesses and the rich who own a lot of assets and that is about it. Assets go up in value as money loses value and it cheapens labor because no one understands inflation. "Hey, I just got a 2% raise!" "No, you got a 0% raise because inflation was 2% this year."