Comment by PowerElectronix
5 hours ago
I like the alternative even less, as it incentivises spending more than you would and taking on debt you don't really need.
5 hours ago
I like the alternative even less, as it incentivises spending more than you would and taking on debt you don't really need.
Well, countries have experienced moderate inflation and moderate deflation, ask the ones who lived through both which one they preferred.
Moderate deflation is fine, it's good even. But only as long as nominal GDP stays stable.
See the so called 'Long Depression' in the 19th century. Which was only a depression of the price level, everything else did well.
For a more sectoral example, see how computer hardware used to get cheaper and cheaper all the time, but total spending on hardware went up.
That is https://en.wikipedia.org/wiki/Jevons_paradox
> taking on debt you don't really need.
How does that work? When inflation goes to 18%, borrowing rates go to 23%.