this post was submitted on 29 Dec 2023
702 points (96.6% liked)
Political Memes
5429 readers
2991 users here now
Welcome to politcal memes!
These are our rules:
Be civil
Jokes are okay, but don’t intentionally harass or disturb any member of our community. Sexism, racism and bigotry are not allowed. Good faith argumentation only. No posts discouraging people to vote or shaming people for voting.
No misinformation
Don’t post any intentional misinformation. When asked by mods, provide sources for any claims you make.
Posts should be memes
Random pictures do not qualify as memes. Relevance to politics is required.
No bots, spam or self-promotion
Follow instance rules, ask for your bot to be allowed on this community.
founded 1 year ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
IDK, I think deflation hurts those that need to borrow money (i.e. credit cards, car, house), since they'll have to pay more in real value as time goes on. Japan's deflation is probably caused by the aging and now declining population?
No, it was monetary policy and the busting of speculative bubbles in their stock market. With their demographic crisis in the last decade they've been going about 1 percent on average and just this year hit 3 percent.
As far as borrowers, there's really only a problem for home owners looking to sell. They will likely be under water for a little bit. There's no reason new loans shouldn't be available because our banks are healthy and loans already come with a cost.
The biggest difference is in how value is grown. Instead of huge mutual funds that follow the market, you have to invest in something that's actually creating value. Which is, of course, more difficult. And yes many people will decide to pull out of the stock market because of that, which might create a liquidity trap. The thing is, we know how to get out of a liquidity trap if one does develop. You just give people money. And since this is a digital economy, you can make sure it gets spent by giving them money with an expiration date.
As for the under water home owners? There's no reason we couldn't institute a government buy out program.
We have the ability and the tools available. We lack only the will and the imagination.
If money has an expiration date, wouldn’t that reduce its value to zero immediately?
Nope. You're thinking of a physical dollar with a date on it. This is digital, so once it hits a business license it just unlocks.
What I meant in regards to borrowers is that during deflation wages will tend to decrease (because money is worth more as time goes on), while the payments will stay the same.
In this proposal we'd be taking measures to keep wages at least stagnant. The entire reason some people want deflation is to bring wages back in line with prices.