7 ms·

I keep reading that "economics isn't a science"

jonknee 8y ago
And it doesn't take a scientist to realize that when things will be cheaper tomorrow people tend to avoid making purchases today. (Think back to when home prices were crashing, there wasn't exactly a rush of people to buy homes that were declining in value.)
- mkirklions 8y ago
  But what if you need to eat food? Or pay your mortgage? How will you pay for things if you dont spend Bitcoin?
  - jonknee 8y ago
    Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.
    - mkirklions 8y ago
      > why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? I find 0 of those good. Upgrading your car when you dont need to is wreckless spending. Maybe the Economy changes to become more conservative and less environmentally damaging. Going out to eat + vacations are unnecessary expenses. And btw, I completely doubt people are going to stop doing those 3.
      - jonknee 8y ago
        Consumer spending is what keeps everyone employed. Even in Silicon Valley because who do you think is buying all the ads? > Upgrading your car when you dont need to is wreckless spending. But that's what creates the used car market, which is much bigger than the new car market. When people stop buying new cars it means tons of layoffs, which means tons of reduced spending by all the previously employed auto workers, which means more businesses lay people off, etc etc.
      - s73v3r_ 8y ago
        "I find 0 of those good." I'm sure you do. But the chef who makes their living cooking food doesn't. The person who makes their living running tours doesn't. And the people employed by both definitely don't.
    - vokep 8y ago
      so it would boost essential spending but take away from useless consumerism spending? And thats a bad thing?
      - jonknee 8y ago
        Consumer spending going away means business spending going away which means jobs go away... Which means more consumer spending goes away and you can fill in the rest. Personal Consumption Expenditures make up ~70% of the US GDP. Unless you really enjoy recessions you don't want to see it go down.
- icebraining 8y ago
  Yes, that's common sense, but we shouldn't trust it blindly. From what I can tell, the evidence on the expected deflation you're talking about paints a different picture: https://www.bis.org/publ/work186.pdf https://www.bis.org/publ/work186.pdf You ask why people would buy stuff when they'll be cheaper later, but then again, why do people buy stuff now when they could put the money on the stock market and take it out later, when it will be worth more than the product costs?

And it doesn't take a scientist to realize that when things will be cheaper tomorrow people tend to avoid making purchases today. (Think back to when home prices were crashing, there wasn't exactly a rush of people to buy homes that were declining in value.)

mkirklions 8y ago
But what if you need to eat food? Or pay your mortgage? How will you pay for things if you dont spend Bitcoin?
- jonknee 8y ago
  Yes, essential spending would happen. But why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? Even a very small change in these behaviors has huge effects because one person's spending is another person's income.
  - mkirklions 8y ago
    > why upgrade your car, or go out to eat, or go on a vacation, or all the other non-essential spending that powers our economy? I find 0 of those good. Upgrading your car when you dont need to is wreckless spending. Maybe the Economy changes to become more conservative and less environmentally damaging. Going out to eat + vacations are unnecessary expenses. And btw, I completely doubt people are going to stop doing those 3.
    - jonknee 8y ago
      Consumer spending is what keeps everyone employed. Even in Silicon Valley because who do you think is buying all the ads? > Upgrading your car when you dont need to is wreckless spending. But that's what creates the used car market, which is much bigger than the new car market. When people stop buying new cars it means tons of layoffs, which means tons of reduced spending by all the previously employed auto workers, which means more businesses lay people off, etc etc.
    - s73v3r_ 8y ago
      "I find 0 of those good." I'm sure you do. But the chef who makes their living cooking food doesn't. The person who makes their living running tours doesn't. And the people employed by both definitely don't.
  - vokep 8y ago
    so it would boost essential spending but take away from useless consumerism spending? And thats a bad thing?
    - jonknee 8y ago
      Consumer spending going away means business spending going away which means jobs go away... Which means more consumer spending goes away and you can fill in the rest. Personal Consumption Expenditures make up ~70% of the US GDP. Unless you really enjoy recessions you don't want to see it go down.
icebraining 8y ago
Yes, that's common sense, but we shouldn't trust it blindly. From what I can tell, the evidence on the expected deflation you're talking about paints a different picture: https://www.bis.org/publ/work186.pdf https://www.bis.org/publ/work186.pdf You ask why people would buy stuff when they'll be cheaper later, but then again, why do people buy stuff now when they could put the money on the stock market and take it out later, when it will be worth more than the product costs?