Deflation decreases the velocity of currency (less incentive to spend due to rising value), which is bad for the economy (less activity, so fewer job opportunities, leading to even less activity).
> Deflation decreases the velocity of currency (less incentive to spend due to rising value), which is bad for the economy (less activity, so fewer job opportunities, leading to even less activity).
I think you meant to say significant deflation is bad. But so is significant inflation. Deflation is actual good in many ways -- worker's wages are worth more, their savings are worth more, and consumption is reduced (whereas inflation can encourage wasteful consumption).
The US is in desperate need of deflation today. Productivity has decoupled from wages -- deflation would make those wages worth more to narrow the gap. Houses have become unaffordable -- impossible to even save a down payment -- deflation will make young people's savings valuable enough to afford that down payment.
Inflation is the snake oil sold to us to benefit the elite at the expense of everyone else.
I think you meant to say significant deflation is bad. But so is significant inflation. Deflation is actual good in many ways -- worker's wages are worth more, their savings are worth more, and consumption is reduced (whereas inflation can encourage wasteful consumption).
The US is in desperate need of deflation today. Productivity has decoupled from wages -- deflation would make those wages worth more to narrow the gap. Houses have become unaffordable -- impossible to even save a down payment -- deflation will make young people's savings valuable enough to afford that down payment.
Inflation is the snake oil sold to us to benefit the elite at the expense of everyone else.