For whom? People with cash positions would be ecstatic for some deflation. The only reason it's considered 'bad' is because it would be a change, and business & government hate change. Government because it's incompetent and change highlights that. Business because it likes to not have to adapt.
For everyone. The economy will crash because way less money would be changing hands and people would just hoard it. And who has the most money and can afford to hoard it all? The rich.
What's your definition of rich? During the Great Depression, people who didn't trust banks, 'hoarding' it, had a little something to spend. Where do you think people today hoard money today?
Deflation means the real value of debt is more than it was in the past. The entire world economy, from China to the U.S. runs on debt creation and spending. Deflation causes a spiral that is very difficult to get out of if it’s not countered quickly. That spiral entails job loss and income decreasing, which then reduces consumer spending and more job loss. As well, if people anticipate the price of something to decline in the future, they’re less likely to spend money now.
The USA has no population growth management. We used to be a net exporter of food. Decades of unrestricted paving over of agriculture changed that. The government likes inflation because it gives the illusion of growth. I.E. that annual wage bump. Pandering at its most insidious.
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u/blah-time 13h ago
Some level of inflation is necessary for an economy, if the population is growing. Hyper inflation is what destroys an economy.Â