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submitted 3 weeks ago by return2ozma@lemmy.world to c/news@lemmy.world
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[-] PhilipTheBucket@ponder.cat 36 points 3 weeks ago

“Inflation” to economists is how much the price is going up this month.

“Inflation” to most people is how much stuff costs.

It feels like there needs to be some acknowledgement of that when this is all talked about, after the superinflation of 2022. The goal should be that prices go back down, not that they go back to going up by 3% per year now that they’re way up high.

[-] Windex007@lemmy.world 8 points 3 weeks ago

The levers which incentives wages closing the gap on the "super inflation" are probably more realistic than the levers that would cause the prices of everything to deflate.

[-] atzanteol@sh.itjust.works 3 points 3 weeks ago

You really don't want deflation. The correct thing now is for wages to go up to match the new costs and this has been happening.

[-] Maggoty@lemmy.world 2 points 3 weeks ago

That's not really true though. The only way to maintain infinite inflation is with infinite growth. But we only have finite resources. We also have modern examples of countries that experience deflation and they aren't the horror shows that the finance industry wants about. For example, Japan.

[-] atzanteol@sh.itjust.works 1 points 3 weeks ago* (last edited 3 weeks ago)

The only way to maintain infinite inflation is with infinite growth

No - monetary policy also effects inflation. See also "stagflation".

We also have modern examples of countries that experience deflation and they aren’t the horror shows that the finance industry wants about. For example, Japan.

It doesn't have to be a "horror show" for it to be "bad". Japan's "lost decades" are hardly desirable.

Deflation would mean money is worth more. Great! But then prices drop. And then salaries drop. And now the ability for somebody to pay back a 30-yr. fixed mortgage gets harder over time rather than easier as it does in an inflationary environment.

So yeah - I'd rather a pay rise to match (or hopefully exceed) inflation that makes it easier for me to repay loans.

Edit: Oh - and frankly the thing that tends to lead to "disaster" is a rapid change in any direction. The entire goal of the "2%" inflation is "price stability". The US economy going into deflation would be catastrophic from our current trend.

[-] Maggoty@lemmy.world 2 points 3 weeks ago

You mean all those people who thought housing was an investment would get caught with a bad investment?

Oh shucks. Well, I better get back in line for the organ grinding machine then.

Both cycles have their downsides. Nobody is saying they don't. But having one without the other is unsustainable. You're afraid salaries will go down. Guess what? They went down anyways. They show a higher number, but every year they don't beat inflation is a year they went down. If wages drop during inflation and deflation, in real and gross terms, then I would venture to guess that inflation or deflation isn't the core problem there, but letting corporations rig the game so they always win over the workers. Also if 2% inflation is stabilization, why isn't 2% deflation? There's no magic thing about crossing the line that makes the economy crash.

[-] atzanteol@sh.itjust.works 0 points 3 weeks ago

You mean all those people who thought housing was an investment would get caught with a bad investment?

WTAF are you talking about? No - I'm talking about home ownership, purchasing a vehicle, starting a business, expanding a business, doing home repair / expansion, etc.

Do you just think "hey - one thing went wrong once so everything to do with that is broken"?

I won't continue this conversation - it's not worth it.

[-] Maggoty@lemmy.world 1 points 3 weeks ago

All of that still happens in countries with deflation.

[-] KillingTimeItself@lemmy.dbzer0.com 1 points 3 weeks ago* (last edited 3 weeks ago)

to most people is how much stuff costs.

inflation to most people is an increase in the cost of stuff* FTFY

also to be clear, the goal is that wages rise to meet the increased inflation, that's the historical trend.

this post was submitted on 03 Nov 2024
166 points (91.5% liked)

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