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.
…and even here it’s subjective. A 4.4 trillion dollar GDP (mostly driven by car companies, har har), a large role in globalized trade relations, less of a housing crisis than many places. A fairly thriving and unique culture and tourist industry.
They’re doing a lot better than many countries. So it all depends on what you think economics should do. Should it be about maximum profits and growth, or some other set of values ect… And that’s really difficult to pin down.
Personally I think it should ultimately serve the politics of the masses (eg. Be under democracy). Otherwise we’re all kind of slaves to it.