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A little deflation can be fine, good even. Inflation oscillated around 0 for most of American history and our economy did great. Most gut aversion to deflation
by smeeth 3y ago
A little deflation can be fine, good even. Inflation oscillated around 0 for most of American history and our economy did great.
Most gut aversion to deflation comes from great depression PTSD.
- alexb_ 3y agoOur economy did great, except for the: - Panic of 1785 - Copper Panic of 1789 - Panic of 1792 - Panic of 1796–1797 - 1802–1804 recession - Depression of 1807 - 1812 recession - 1815–1821 depression - 1822–1823 recession - 1825–1826 recession - 1828–1829 recession - 1833–1834 recession - 1836–1838 recession - 1839–1843 recession - 1847–1848 recession - 1853–1854 recession - Panic of 1857 - 1860–1861 recession - 1865–1867 recession - Panic of 1873 (which lasted until 1879) - Depression of 1882–1885 - 1887–1888 recession - 1890–1891 recession - Panic of 1893 - Panic of 1896 - 1899–1900 recession - 1902–1904 recession - Panic of 1907 - Panic of 1910–1911 - Recession of 1913–1914 But besides that we did fine.
- hncensorship69 3y ago1. Many of those economic events were due to many factors, deflation not being one of them 2. Nearly all of them were relatively minor and recovered on their own 3. Now make a list of all the economic disasters that have happened under fiat money / central bank / pro-inflation policies. Ideally the economy oscillates between periods of low inflation and low deflation. This would reflect natural business cycles.
- dragonwriter 3y agoThe Long Depression (what GP refers to as the Panic of 1873), and which was popularly known as the Great Depression until the later one stole the name, was also deflation-related. Some of the others, too.
- alexb_ 3y agoSure, I'll list every single time unemployment broke 10%. - 1981-1982 recession, caused by the oil crisis a few years before, had 10.8% peak unemployment - The Great Recession (again, there was deflation here) with 10% peak unemployment. - COVID, which had a 14.7% peak unemployment for a few months before the US made a smooth landing. That's it.
- thesuitonym 3y agoNow do the post war era.
- deleted 3y ago[deleted]
- smeeth 3y agoWhat exactly is your point? Is it that the American ascent to becoming the richest economy on earth wasn’t perfectly smooth and therefore not “fine”?
- mjh2539 3y agoWhen you have deflation, people save more money, or delay spending it, because their dollars will be worth more tomorrow; but this reduction in spending just causes more deflationary pressure ("Undercut our competitors or we won't make any sales!"). This process is self-perpetuating and can get out of hand very quickly.
- deleted 3y ago[deleted]
- TMWNN 3y ago>Inflation oscillated around 0 for most of American history and our economy did great. I've heard it said that the British pound was worth the same in 1914 as in 1614.