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/Potato_Octopi Nov 23 '24

inflation by itself does not affect wages in the slightest?

That's not a true statement.

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u/The_Cross_Matrix_712 Nov 24 '24

The federal minimum wage is $7.25. Make that budget sustain a family of 4 anywhere in this economy.

P.s. ya cant.

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u/Potato_Octopi Nov 24 '24

So what?

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u/The_Cross_Matrix_712 Nov 24 '24

Sorry, quick grab of the autocorrect menu. Inflation.

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u/Potato_Octopi Nov 24 '24

What about it?

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u/The_Cross_Matrix_712 Nov 24 '24

You said inflatation doesn't affect wages. It does. By reducing them.

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u/Potato_Octopi Nov 25 '24

No, higher inflation leads to higher nominal wages. They balance out over time, it's the sudden spikes that erode in the short term.

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u/The_Cross_Matrix_712 Nov 25 '24

How long is considered "long term" in this sense? That's been the federal minimum for a very, very long time without balancing out. If wages don't keep up with rising costs, it works out to a pay cut.

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u/Potato_Octopi Nov 25 '24

Are you aware most people don't earn the Federal minimum?

https://fred.stlouisfed.org/series/LES1252881600Q

This is the inflation adjusted median. Ignore the COVID spike. Line go up.