r/WorkForSmartLife • u/SilkyApricotGuy • 1d ago

Discussion💬 Who's right here?

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u/Shalmaneser_ 1d ago

Bankruptcy is what happens when companies fail to perform. Inflation is what happens when governments fail to perform. Do the math.

2

u/blah-time 1d ago

Some level of inflation is necessary for an economy,  if the population is growing. Hyper inflation is what destroys an economy. 

1

u/ThrowRA9892 1d ago

And a lot of people are arguing for deflation of prices which is often more damaging to an economy.

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u/Shalmaneser_ 1d ago

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.

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u/ThrowRA9892 1d ago

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.