this post was submitted on 19 Sep 2023
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Work Reform

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[–] Jake_Farm@sopuli.xyz 44 points 1 year ago* (last edited 1 year ago) (31 children)

That is something I wonder about. Inflation makes the poor poorer but when asked, economists are like "trust us, inflation is good".

[–] Cethin@lemmy.zip 20 points 1 year ago (27 children)

A small amount is good. Deflation makes it so not spending money is more beneficial. The longer you wait to spend the more the money is worth. This causes fewer products and services to be purchased, which pays for wages. Inflation makes the opposite true. The longer you wait to spend your money the less it's worth. It encourages spending, not saving. Inflation that outstrips increases to pay is obviously very bad though.

[–] Jake_Farm@sopuli.xyz 1 points 1 year ago (1 children)

Does deflation decrease all spending or just luxury and investments?

[–] nybble41@programming.dev 10 points 1 year ago

Just luxury spending and underperforming investments. Essential spending can't be deferred, and worthwhile investments will outpace any natural rate of deflation. Forced inflation drives conspicuous consumption and malinvestment, but in doing so it increases monetary velocity, which helps bankers and tax collectors extract higher rent from the economy.

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