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As a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fu
by logicalmonster 5y ago
As a defense of deflation, I'd say that "being incentivized to spend less doesn't mean that you're spending zero". Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment. You'll be very-well incentivized to work in a deflationary environment, you just might think a lot harder about buying something like a movie ticket if that money might be worth more in the future.
- verdverm 5y agoRight, so discretionary spending goes way down. I may be incentivized to work, but who can afford to employ me?
- logicalmonster 5y ago"Humans still need to eat and stay warm and fulfill their daily needs in a deflationary environment." EDIT: to add onto that answer, I'd say that just as there are still savers in an inflationary environment, there will still be consumers in a deflationary environment. Incentives matter, but are not absolute drivers.
- verdverm 5y agoI'm not convinced this logic holds up. It is counter intuitive with economic theory and history
- logicalmonster 5y ago> "It is counter intuitive with economic theory" If you said "It is counter intuitive with Keynesian economic theory", I'd see your point a bit more. But different schools of thought like the Austrians view the importance of short-term consumption differently than what is a sort of textbook model of the world.