5 ms·

I think you're too focused on dollar amounts because the value of a dollar is in some ways arbitrary (hence why they can have an inflation target and have that

I think you're too focused on dollar amounts because the value of a dollar is in some ways arbitrary (hence why they can have an inflation target and have that make sense). You can have things practically get cheaper even with inflation. For example, if wages rose 10% in a year but prices rose 2% then in a practical sense things are much cheaper despite having 2% inflation.

johnnyworker 3y ago
https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ Productivity keeps rising, wages don't (to the same degree). Slice it how you want, that's the bottom line, and the reason is exploitation by people who are addicted to adding another zero to a number where the last few zeroes already made no difference, because the issue is in their head, not their bank account.
- supermatt 3y ago
  WTF happened? NASDAQ maybe...
- RiDiracTid 3y ago
  It was 1973, and it was the oil shock: https://en.wikipedia.org/wiki/1973_oil_crisis https://en.wikipedia.org/wiki/1973_oil_crisis
  - xkekjrktllss 3y ago
    [dead]
- freejazz 3y ago
  > Productivity keeps rising Not according to the fed...
- red-iron-pine 3y ago
  so what did happen in 1971?
qp11 3y ago
But to me the goal of ever growing wages and prices doesn't make much sense, especially with technology constantly disrupting things. How is this supposed to work?
- ilammy 3y ago
  The idea is to disincentivize hoarding cash and promote active usage of money in the economy, because governments believe that having useful markets is better than not having them. Regardless of the current living standards and your wages. Rising prices and wages are not the goal per se. So all your dollars are put on fire and lose 2% of their value annually. You can watch your cash burn to spite the Fed, or you can give it to someone else and make it their problem what to do with dollars while you enjoy whatever you bought.
  - Detrytus 3y ago
    "Hoarding cash" caused by deflation is actually good thing, because it encourages frugal living. Current inflationary policies result in companies trying to sell people all kinds of useless crap, thus wasting natural resources and human effort. Sure, in deflationary environment overall GDP growth would be much slower, but it will also be more sustainable in the long run, without big boom-bust cycles.
    - tdb7893 3y ago
      Nothing is stopping people from saving (I mean, except for low real wages), even with inflation, it's incredibly easy nowadays to put money into investments. Also I don't understand how deflation would eliminate the boom/busy cycles
      - bluGill 3y ago
        Sure, but cash is lower risk. While overall investments tend to do well, I've seen many do awful. Some are legitimate investments that just go bad, while others are scams. People are not as good at telling scams from legitimate investments as they like to think they are. If there was no inflation at all just keeping your money for a rainy day in your mattress (any place a thief is unlikely to look) would be good advice, but cash loses 2% every year so it isn't.

johnnyworker 3y ago

https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/ Productivity keeps rising, wages don't (to the same degree). Slice it how you want, that's the bottom line, and the reason is exploitation by people who are addicted to adding another zero to a number where the last few zeroes already made no difference, because the issue is in their head, not their bank account.

supermatt 3y ago
WTF happened? NASDAQ maybe...
RiDiracTid 3y ago
It was 1973, and it was the oil shock: https://en.wikipedia.org/wiki/1973_oil_crisis https://en.wikipedia.org/wiki/1973_oil_crisis
- xkekjrktllss 3y ago
  [dead]
freejazz 3y ago
> Productivity keeps rising Not according to the fed...
red-iron-pine 3y ago
so what did happen in 1971?

qp11 3y ago

But to me the goal of ever growing wages and prices doesn't make much sense, especially with technology constantly disrupting things. How is this supposed to work?

ilammy 3y ago
The idea is to disincentivize hoarding cash and promote active usage of money in the economy, because governments believe that having useful markets is better than not having them. Regardless of the current living standards and your wages. Rising prices and wages are not the goal per se. So all your dollars are put on fire and lose 2% of their value annually. You can watch your cash burn to spite the Fed, or you can give it to someone else and make it their problem what to do with dollars while you enjoy whatever you bought.
- Detrytus 3y ago
  "Hoarding cash" caused by deflation is actually good thing, because it encourages frugal living. Current inflationary policies result in companies trying to sell people all kinds of useless crap, thus wasting natural resources and human effort. Sure, in deflationary environment overall GDP growth would be much slower, but it will also be more sustainable in the long run, without big boom-bust cycles.
  - tdb7893 3y ago
    Nothing is stopping people from saving (I mean, except for low real wages), even with inflation, it's incredibly easy nowadays to put money into investments. Also I don't understand how deflation would eliminate the boom/busy cycles
    - bluGill 3y ago
      Sure, but cash is lower risk. While overall investments tend to do well, I've seen many do awful. Some are legitimate investments that just go bad, while others are scams. People are not as good at telling scams from legitimate investments as they like to think they are. If there was no inflation at all just keeping your money for a rainy day in your mattress (any place a thief is unlikely to look) would be good advice, but cash loses 2% every year so it isn't.