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.
That’s obviously not what I’m referring to. I ignored the environmental stuff as I don’t want to get off topic. Your points aren’t invalid, but they are off topic. Try to focus please.
Back to the actual economics we’re talking about. You’re thinking only about the money going into your pocket. You’re not thinking about the functioning of society as a whole. And you’re not looking more than two inches in front of your face. The deflationary cycle is also self-perpetuating because it also involves cutting demand for not just goods, but labor. Look at the Great Depression if you want to see what a deflationary spiral looks like.