The last time USA had extended deflation, the Great Depression happened. When people stop consuming, retailers fire their workers. Then fewer people can consume, so more people get fired. This goes on enough, then its not just stores who fire workers, but it trickles to factories, R&D, office workers, etc. etc. The longer deflation happens, the further it spreads and the more people lose their jobs.

Ever since the Great Depression happened, US Policy has been strongly anti-deflation. Our policy is to "err" on the side of slight inflation.

Line go up….this quarter, or else.

Right?

Like... It's not some great mystery. We see inflation at 5% and prices go up 8, 10...15%...and the companies say it's because inflation.

I am a private music teacher, and while most private teachers will go through a school to do lessons, I've just gone freelance and do it all myself. I get to set prices and recruit or not and I have so much freedom, but one thing I found was that in setting prices, people will pay what you say. If they can't I'll chat a bit to see what the situation is and see where I can make discounts of course, but wealthy families are willing to do $100 an hour easy. I know I could bump it to $150 for some.

Basically all I'm saying is inflation is BS for companies making up higher prices.

They're incapable of sincerity.

Inflation is fine as long as wages rise with it.

The issue is our economy is entirely built around low interest rates and low inflation. It's been that way for a generation. This benefit asset-holders like home owners and the wealthy. Hence why they are doing everything possible to avoid wage-growth. They don't care about inflation, what they are terrified of is wage growth and higher interest rates.

Not an economist per se, but what my econ prof in college put on the test is, more or less, that workers' penury will eventually force them to take action to raise wages. This includes everything from strike actions to workers in general simply refusing to take the lowest-paid jobs anymore. The fact that employers will delay this process as long as possible and keep the raises as small as possible and workers will have to fight like hell to get even pitiful raises is also part of the theory. It's a story of gIvE aNd tAKe that ignores the government took massive action last year to prevent the labor market from responding to the new market conditions and routinely acts to prevent wages from rising "too fast." The price of everything can inflate to hell, but if the price of labor goes up in direct response just like every other commodity, whoa now, stop the presses, that's an economic problem.

Some inflation is necessary to prevent wealth hoarding. It's one reason we moved away from the gold standard.

Minimum wage needs to be tied to it though because we're still seeing a huge amount of wealth disparity which is exactly what inflation is meant to solve.

Inflation is easier to handle and not as bad for the economy as deflation, so that's where we are always at.

2% inflation and 2.5%-3% wage gains where the difference is made up by productivity gains would be the ideal.

The thing people are scared of is a wage-price spiral where inflation is 10% so wages have to rise 10% which increases employer costs so they raise prices 10% so wages have to rise 10% etc. High inflation that becomes self-perpetuating.

Wages rising faster than inflation is good, but the risk of a wage-price spiral is what people are afraid of with rising wages.

I'm sorry, I don't understand.

Perhaps you could try again, in english?

/Executive

Hah. Like the CEOs will bear any brunt of this burden.

They won't. They will continue to cut costs by skipping health and safety requirements and laying off employees. There must always be profit.

100% agree. I have personally stopped eating fast food months ago. The quality is the worst it has ever been and it is outrageously priced. Same goes for soda, chips, and other junk food. Junk food was supposed to be cheap. When you stop making it cheap....you don't have a consumer base.

Guillotine's can also go up.

There is no sin greater in capitalism than uncaptured profit, none.

Fuck capitalism and the barbaric world it creates. We are better than this but the sociopaths like to count big numbers.