I’ve been wondering this question for a while. Ignoring current events, why is a little bit of inflation desirable?

I do understand that it’s done to “stimulate” the economy so people don’t let their cash rot in a checking account, but isn’t it a zero-sum game? Everybody says that money is not meant to stay where it is, rather, should flow through the economy. But if the economy always needs injections of liquidity because otherwise it fails, isn’t the economy broken?

I feel like there’s something I can’t comprehend about that.

  • CrimeIsLegalNow@ani.social
    41·
    6 hours ago

    And their problems had nothing to do with deflation. They’re rampant consumerists and innovation chasers who just also happen to value conservative savings plans. They got outcompeted in the local area by cheap Chinese labor and their adoption of neoliberal economics did what it did everywhere else, sabotage their working class’s purchasing power even as they lost their foreign markets…

    And they’re still the world’s fourth largest economy with the 12th largest and rapidly aging population.