Inflation and Unemployment usually hold themselves in a balance. As long as the economy isn’t actively tanking, lower unemployment means higher inflation.
More people have the capacity to buy something, there is more demand in the market, so prices increase slightly.
Additionally, a slight inflation rate of 2-2,5% encourages spending. Any given day is on average the cheapest day to get a good, waiting longer might mean increased prices because of inflation.
A deflationary currency would lead to hoarding: why would you make a larger purchase now, if you know that deflation will drive down the price. Deflation turns money from a currency into a security. This is one of the main reasons for Bitcoin’s lack of adoption as a currency, since paying any amount of Bitcoin now for a good seems like madness given how much the value of your Bitcoin might go up.
Last but not least: Every major economy is built on debt taken on by the state. Inflation reduces the cost to borrow for the state. Sure, a fixed interest rate of 10 million per year sounds bad, but next year, the state will have more money overall, so a repayment costs less.
That’s btw one reason why the claim of “the gubernmint alredy has sooo much monies, ebry year they has recoord incoome, they has speending prublem” is so God damn idiotic. The government will have a record income by design. There is more money to be taxed every year, because of inflation.
You’re average consumer doesn’t think like this. Our system is sadistic, and economists are psychopathic to think so.
But in any case, the meme points to a few things:
Cost of living outgrowing wage
Stratification of cost of goods - with exponential growth, the minute difference in cost between goods or property twenty years ago is now large. Meaning e.g. new cars which were affordable are now a sign of wealth.
Failure to account for disruption due to major economic occurrences(e.g. artificial inflation due to greedy profit seeking, and corporate’s oligopoly on job supply)
Gobloads of other nuance
In other words I’m positing that steady infinite inflation is unsustainable in the long run unless you address all of those or your specific goal is to grow the wealth gap and entrench class separation further. It seems the goal of the political class has been the latter over the last 4-5 decades.
I’m not an economist so most of what I know I picked up over the years, but a lot of people definitely do think about inflation when they think about what to do with their money. Most people I know are aware of the fact that if you just keep your money in your bank account you’re losing money. The point is to then encourage people to invest their money into stuff so they can benefit the economy. The things you mentioned are mostly the consequences of bad economic policies, not necessarily inflation. Whilst they might not exist were it not for inflation, that would bring about other problems as well.
Inflation and Unemployment usually hold themselves in a balance. As long as the economy isn’t actively tanking, lower unemployment means higher inflation. More people have the capacity to buy something, there is more demand in the market, so prices increase slightly.
Additionally, a slight inflation rate of 2-2,5% encourages spending. Any given day is on average the cheapest day to get a good, waiting longer might mean increased prices because of inflation.
A deflationary currency would lead to hoarding: why would you make a larger purchase now, if you know that deflation will drive down the price. Deflation turns money from a currency into a security. This is one of the main reasons for Bitcoin’s lack of adoption as a currency, since paying any amount of Bitcoin now for a good seems like madness given how much the value of your Bitcoin might go up.
Last but not least: Every major economy is built on debt taken on by the state. Inflation reduces the cost to borrow for the state. Sure, a fixed interest rate of 10 million per year sounds bad, but next year, the state will have more money overall, so a repayment costs less.
That’s btw one reason why the claim of “the gubernmint alredy has sooo much monies, ebry year they has recoord incoome, they has speending prublem” is so God damn idiotic. The government will have a record income by design. There is more money to be taxed every year, because of inflation.
You’re average consumer doesn’t think like this. Our system is sadistic, and economists are psychopathic to think so.
But in any case, the meme points to a few things:
Cost of living outgrowing wage
Stratification of cost of goods - with exponential growth, the minute difference in cost between goods or property twenty years ago is now large. Meaning e.g. new cars which were affordable are now a sign of wealth.
Failure to account for disruption due to major economic occurrences(e.g. artificial inflation due to greedy profit seeking, and corporate’s oligopoly on job supply)
Gobloads of other nuance
In other words I’m positing that steady infinite inflation is unsustainable in the long run unless you address all of those or your specific goal is to grow the wealth gap and entrench class separation further. It seems the goal of the political class has been the latter over the last 4-5 decades.
I’m not an economist so most of what I know I picked up over the years, but a lot of people definitely do think about inflation when they think about what to do with their money. Most people I know are aware of the fact that if you just keep your money in your bank account you’re losing money. The point is to then encourage people to invest their money into stuff so they can benefit the economy. The things you mentioned are mostly the consequences of bad economic policies, not necessarily inflation. Whilst they might not exist were it not for inflation, that would bring about other problems as well.