this post was submitted on 30 Dec 2024
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cross-posted from: https://lemm.ee/post/51182148

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[–] [email protected] 16 points 5 days ago (3 children)

Deflation, even in small amounts, is more dangerous, thats why ideally you prefer having a small amount of inflation.

This is only accurate if you measure economic success by "Corporate profits".

Deflationationary phases are very helpful for the working class, as their dollar now buys MORE things. Like food. And housing. And health care.

[–] dondelelcaro 20 points 5 days ago (1 children)

Deflationary periods may be helpful to those with large amounts of cash or cash equivalents, which generally isn't the working class. Wage growth outpacing inflation helps the working class more.

[–] [email protected] 4 points 5 days ago (1 children)

Wage growth outpacing inflation helps the working class more.

Except, by design, that will not happen, not for longer than a few quarters or so.

Why do you think there is a push to get people back in the office?

[–] Passerby6497 2 points 4 days ago

Why do you think there is a push to get people back in the office?

Because the corporate realty market is a bubble, and companies have to find a way to justify big spends if they can't get out of a lease, and plenty of corporate landlords can't let people out of their leases because then their buildings would be underwater and likely forclosed?

[–] JWBananas 5 points 5 days ago (2 children)

Deflationationary phases are very helpful for the working class, as their dollar now buys MORE things. Like food. And housing. And health care.

What kind of braindead take is that? The working class? The same working class that majorly lives paycheck to paycheck and can't even afford an unexpected $500 expense?

What dollars do you think they are going to have in a deflationary economy after they get laid off?

[–] Zorque 1 points 5 days ago (1 children)

You know in what form those paychecks generally come in? Cash, so their paycheck is now literally worth more without wage increases (which aren't horribly stable for those generally loving paycheck to paycheck).

[–] JWBananas 7 points 5 days ago (2 children)

If they still have a paycheck, sure. But historically, deflation leads to unemployment.

[–] Pacattack57 3 points 5 days ago

Yes. That is caused by corporate greed. Not deflation.

[–] hark 0 points 3 days ago (1 children)

You've got that backwards. People get laid off, can't buy things, then prices go down because demand is lower.

[–] JWBananas 2 points 3 days ago (1 children)

It's not just consumer spending that influences inflation,/deflation but also institutional spending. The consumer price index is a lagging indicator. Decreases in institutional spending precede unemployment and the eventual reduced demand for consumer goods and services. And increases in the fed rate (and/or other forces which cause the cost of borrowing money for institutions/investors to rise) generally precede that.

[–] hark 1 points 2 days ago

Institutional spending will decrease as credit markets seize up. If deflation is predictable at, say, 1-2%, then it shouldn't be a factor since credit would account for that.

[–] Raiderkev -2 points 5 days ago (1 children)

"Deflationationary phases are very helpful for the working class, as their dollar now buys MORE things. Like food. And housing. And health care."

Shhh can't be having that. Don't worry, we beat inflation. Everything is just more expensive now. Deal with it.

[–] [email protected] 3 points 4 days ago

Their dollar buy more until the company folds as the economy goes to shit.