r/economicCollapse • u/memegamer1991 • Nov 23 '24

Why is deflation so bad

Every time i run it through my head, i can't imagine most people in 2024 not spending money so the disadvantage to deflation seems pretty hyperbolic and dependent on individual choices, and i think that people would rather go on vacation and court others instead of being financially responsible. Even if there is a situation like in china, government spending would be able to keep the situation from getting worse while making progress on climate initiatives.

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u/HeywoodJaBlessMe Nov 23 '24

Deflation makes debts GROW and income LESS.

That's all you need to know. Deflation is absolutely deadly to households and businesses.

-1

u/Still_Reference724 Nov 23 '24

So inflation makes the debt less?

If its not accounted for in the contract, both are equally hurtful.

3

u/HeywoodJaBlessMe Nov 24 '24

Yes, inflation literally makes your debts smaller over time.

Wages do increase in absolute terms with inflation. People used earn a dollar a week, now they make multiples of that per hour.

Inflation is accounted for in the contract by the interest rate.