[bko]

What if prices didn't go up, but down reflecting a more productive prosperous society?

Imagine everything getting cheaper every year. Every year you'd see your rent and food bill go down. No more arguing about bumping the minimum wage or the middle class being left behind. Everyone would get richer by default.

Of course this is highly unpopular with economists. They'll tell you no one would buy anything if things got cheaper. But some things do get cheaper every year, mainly technology. You can wait a year and buy that new TV you want at a 10% discount, but that doesn't stop us from purchasing it today.

But of course stopping inflation would mean not printing trillions of dollars and giving them to large banks, so obviously thats a no-go

https://www.covidmoneytracker.org/

[dragonwriter]

> Of course this is highly unpopular with economists. They'll tell you no one would buy anything if things got cheaper.

No, they'll tell you that minor sector-specific disruptions that would, in an inflationary economy, be met with localized temporary real pay cuts via static nominal wages instead (because of the psychological difference between nominal pay cuts and static pay, even if the real pay change is the same) be met instead with massive job losses with ripple effects throughout the economy in a deflationary system making the economy more volatile, with deeper more frequent downturns, and more painful transitions as demand shifts across sectors.

Deferred purchases is more of a concern economists have with transitory deflation than persistent, planned, systemic deflation.

[whimsicalism]

Ah yes, and the real price of your mortgage and student loan payments would go up every year, sounds like paradise.

[bko]

How do you figure? Homes would go down in price, but your mortgage would stay the same. It's kind of like how people finance cars, even though the value of their car is going down while they're paying down the price of a brand new car.

[dragonwriter]

> How do you figure?

Assuming amortization with fixed nominal payments, the real (adjusted for CPI) price if the payments goes up over time with deflation, because the buying power sacrificed to the payments increases.

[whimsicalism]

In a deflationary environment, the real amount oustanding on your mortgage goes up.

[jbay808]

Perhaps, but likewise the home itself is likely to be much cheaper and so a smaller loan is needed, if any.

[whimsicalism]

You can't just get a smaller loan every year.