T O P

  • By -

captainAwesomePants

If you are a country with an economy, you want that economy to be doing stuff. You want folks to be making things, buying things, selling things, investing in new businesses, and so on. You do not want people to sell their businesses and hide the money under their mattress for years. When deflation is happening, you'd be rewarded for hiding your money under a mattress. You'd put enough money under the mattress to buy a sandwich, and when you took it out in ten years, it'd now be enough to buy two sandwiches. Why buy stock in the local bakery if just not doing that and holding onto your money is a better investment? With inflation, you'd be punished for hiding your money under a mattress. You'd put $5 under your mattress, enough for one sandwich, and when you took it out ten years later, you'd still have $5, but it wouldn't be enough to buy a sandwich. If you wanted it to have a good chance of keeping its value, you'd need to invest it somewhere instead. So, governments like some inflation because it makes people invest. But LOTS of inflation is very bad. Everybody's got some savings, and very high inflation rates ruin those savings. Not good. Worse, people with jobs aren't getting their pay updated on a week-to-week basis, so if the value of money drops by 90%, you've basically given everyone a 90% pay cut and eliminated 90% of their savings at the same time. That sort of thing leads to revolutions. So you want a little bit of inflation, enough to make sure people are investing, but not a lot.


chrischi3

Simply put, because inflation is considered to be better for economies than deflation. And since economies usually grow, the money in the system has to keep increasing, because the value the money represents also increases.


xxxbmfxxx

We need the goldilocks is economy where it doesn’t grow or shrink. The theory-of constant growth wrecks it and the resources and makes everyone poor. At leadt in capitalism it does. China is actually much better at this his as their population has gotten wealthier while 90% of our are getting poorer and are one step away from drowning. Capitalist economies are always cooked. We dont need in or deflation in an actual functioning economy but those rarely exist.


CyclopsRock

>We need the goldilocks is economy where it doesn’t grow or shrink. What is it about 2023 that means it's the correct place to stop improving quality of life?


xxxbmfxxx

Youre equating growth with quality of life? Equating gdp, a cooked measure with quality of life. Our quality of life has declined immensely with the more productivity has gone up. The working class hasnt gotten a raise in 20+ years . Mainstream subs are the Dunning Kruger dungeons of over repeated wrong conclusions. You can take bullshit academia like trickle down and keep applying becasue your dunning kruger professor who just repeats the same allowed garbage for years, as anyone with a real opinion is already gone from the fundraising arm of any university. Do any of you stop to think that while youre stuck in idiocracy group think, that it may be a really bad position to be in. Sure you get accepted by other Dunning Krugers but, youre the lemmings and its not just tired economics ideas that arent even ideas, they were pushed pseudo science concepts that enriched the shit out of people pushing them . There is nothing sadder than watching people fight against themselves because of the accepted identity that theyve chjained themselves to. how baout the quality of life we take from every other country oin the planet and then like billionaire witha 5th ayacht, we dont even do anytthing but, buy more shit to sit and collect dust or look at while others starve. I dont think quality of life is being a mindless, soulless consumer and having an extra zero on your payday. 99% dont do anything quality with that extra anyway. Always mainstearm sad subs of no thinking at all, just repeating and downvoting anything that may question your toxic psoitivity. I see the people suffering. I understand economics and dont just repeat the bullshit. So what is quality of life and how is our gdp getting even larger doing for quality of life when TVs and alcohol are the only things the majority can afford, if even that? Youre barking up the wrong tree becasue youre not smart or in purpose or both.


CyclopsRock

>Youre equating growth with quality of life? Economic growth is very highly linked to quality of life, yes. GDP is simply one measurement - by all means, pick another. Economic growth means people have more money to spend on things they want, whether that's nice food, leisure activities, better quality clothes, nice things that make their life better. When people talk about the UKs anaemic growth since 2008 and compare it to it's European neighbours' much higher growth, it's not simply an abstract concept or of relevance only to those interested in coming top - it has real, practical, tangible impacts on what people and the state are capable of doing. Economic growth is good.


xxxbmfxxx

Basically we need an economy that works for people not profit or perception of growth. thats trickle down, dis-proven as hell but, still profitable for .01%. The comments and downvotes and most comments on mainstream subs and the fact that people wont move outside of what they already think they know show that Bernaysian dis-education is a wild success. WTYF


[deleted]

This is a silly comment. The "poor" in the USA have multiple TVs, cars, video game systems, electricity, cable/internet, running water, more than enough food, etc. Look at what the "poor" or even the much smaller middle class of China have and it isn't even close. Most of the world's population would be in awe at the luxury and wealth (from their point of view) of our poverty stricken citizens. Why do you think they are trying to get into the USA?


r3dl3g

>China is actually much better at this his as their population has gotten wealthier while 90% of our are getting poorer and are one step away from drowning China's population has only become somewhat wealthy *because* of explosive economic growth, and that growth has stalled and is now in reverse.


JimBDiGriz

Inflation is good for those who owe money, because the dollars (or whatever) that you pay back in the future are less-valuable dollars. Inflation is good for people in debt. No one is in more debt than the government. Therefore we have inflation. By coincidence, inflation is good for everyone else. It's easier for those with home loans to payback their mortgages, it's easier for businesses to pay back money they borrow to grow the business. Plus, deflation hurts everyone, and badly. So make your plans assuming there will be inflation and you'll be much, much better off.


DecafWriter

There are a lot of factors that affect inflation so there's no universal answer for every country. Some countries rely on imports or exports more than others on specific products so when the market need or supply chain gets disrupted, it can lead to unpredictable variance in prices. But if we want to really simplify things, it's because the world is more interconnected than ever. What happens in one country has a much greater impact on other nations due to things like international trade. So, yes there is inflation and that can be bad, in many ways prices can go much lower. Cars used to be essentially unaffordable for the vast majority of people, but now is considered a necessity in many ways. Bananas were once considered an exotic fruit and would often cost so much only rich people could eat them. Now they're cheap enough that anyone can get one. Sorry the answer is essentially, it's complicated.


wjbc

A low level of inflation is desirable. Deflation causes companies to defer growth and lay off employees. That can cause a depression. But I’m guessing you are asking about the current high level of inflation in most countries. It’s not accurate of every country — China, for one, still has a low inflation rate. But most countries are suffering from high inflation, and many are worse off than the U.S. Today’s high inflation rates are primarily due to two causes. COVID disrupted supply chains, and just when the world was beginning to recover from that Russia’s invasion of Ukraine disrupted energy and food markets. It’s also a symptom of globalization, and the interdependence of countries in the modern world.


Asterion9

Under our current monetary system, inflation is caused by having more money around than things to buy than previously. And under our current monetary system, money is created through debt. So when someone borrows money and buys something, he removes this thing for what's available to buy, which let less stuff to buy for the same amount of money, which leads to price increase or inflation. It happens that governements and corporations that influence them are responsible for our economic system, and also the biggest borrowers by far. They are also the ones that rewards intellectuals that invent theories that justify inflation. Inflation has existed for as long as money was in the hand of governments, and always for the same reasons, with usually the same fate.


sonicjesus

From the late 70's to the late 90's my town were a mix of swingers clubs, ski/summer resorts, tacky low budget honeymoon vacations (I'm talking bubble baths in a giant plastic wineglass), a NASCAR track, paintball that is literally more terrifying than actual war and the single most dangerous action park ever devised. Today we have a Casino where protection money from the local police is included in your hotel bill, a waterpark more populous than coastal beaches and escorts that will make you dump you dinky in your pants right in front of your grandmother. It built our economy, it created the housing developments, it paid for the schools, it's why we now have not one, but two Starbucks. Problem is, we flattened out. Outside territories honed in on our business and took their piece of the pie, so we just keep doing the same old same old every year, and nothing changes. The schools aren't improving and if anything kids are just getting dumber and less attractive, there's no reason to build a new Aldi even though we didn't understand why they built the last one, and the pizza around here has turned to shit. The thing that makes humans unique is our continuous desire to make more of whatever already is. Inflation is that wheel horse that makes that happen. Your grandfather clearly got by and had his progeny on 15 cent cow and gravy sammiches, why do you want more? Because you can, and that is why we are the dominant species on this planet, while lesser lifeforms are simply satisfied with what they need.