[carlosjobim]

There's no reason for that. As production improves in efficiency it is natural for things and services to become cheaper. That also means you get more for your money, instead of getting more money. That concept is not too strange for the population to accept.

[kube-system]

For a few items in your CPI basket, that's fine. If you have significant deflation across your economy on average, people will start losing their jobs en masse, and zero dollars doesn't buy anything.

[carlosjobim]

Why should that be the case? As I said, if you can buy more for less you won't need a raise.

[kube-system]

Likewise, business revenues will be going down but the investments in capital have already been allocated. Businesses start laying off employees to try to balance the books. Those newly unemployed workers, in turn, now have less money to spend. More businesses find themselves in the red, and it leads to more layoffs.

This is called a deflationary spiral. Basically every period of significant deflation in the past has led to dire economic consequences. You really do not want people to stop spending money.

[carlosjobim]

This sounds like a myth. If the value of your currency is increasing, staying at 0 means you're actually turning a profit, just as making a 10% profit when the inflation is 50% means you're losing money. Inflation is a tax and redistribution of wealth, it's really not more complicated.

[kube-system]

Zero isn’t bad. I was explicitly talking about deflation above. The effects of deflation I explained above is not a myth, it is introductory macroeconomics.

https://www.khanacademy.org/economics-finance-domain/macroec...

Deflationary spirals have happened in the past, but they have stopped since we moved away from the gold standard and we can now intentionally inflate our currency to prevent deflation.

[carlosjobim]

If you have a real business, you're still increasing value in the equation or breaking even. Deflation means you might have to lower wages, but your employees are still getting the same value paid. It means you might have to lower prices, but you're still getting the same value sold. It also means your costs are lowering, so as long as you have a value-adding business you will beat deflation. If not, then you shouldn't be in business.

In today's inflation economy, there are tons of tons of businesses that on paper make a profit, but in reality don't create value because that profit is worth less than the numbers tell. And what's worse: Individuals are becoming poorer and poorer without realizing it, because the nominal value of their pay check might be higher, though the value of the money is probably half of what it was 10 years ago.

And as individuals adapt their lifestyle and spending to circumstances we arrive at the ridiculous situation of today, where most young people after maybe a decade of working and advancing their careers still don't own a home, still don't have any children, and don't dream of splurging on luxurious hobbies.

Thank God there is a huge trend right now with workers of all "collars" saying "fuck it" and doing what they can to change companies, change careers, change cities and change countries to get as much as possible for themselves instead of continuing to be exploited.