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> The poor will always have an incentive to work hard to get rich. To get rich you need capital. But that is hard to get in a deflationary economy - the supply
by The_Colonel 3y ago
> The poor will always have an incentive to work hard to get rich.
To get rich you need capital. But that is hard to get in a deflationary economy - the supply is finite, the rich have only a small incentive to invest since they get wealthier just by sitting on it risk-free.
As a result, getting access to capital would be very expensive with high interest rates. That applies to mundane things like mortgages as well - good luck getting a 30-year mortgage, you're destined to rent forever. Poor would stay poor, rich would get richer.
- jongjong 3y ago> To get rich you need capital. But that is hard to get in a deflationary economy Believe me, it's nearly impossible to get capital in an inflationary economy so I don't understand this point. At least in a deflationary economy, it's equally difficult for everyone. In an inflationary economy, proximity to the source of inflation confers an advantage for some (Cantillon effect) so it's unequal and unfair.