3 ms·

The cynic in me is certain that inflation, among other things, is a tool for lowering peoples' wages. Not in numbers, but in value.

• spencerchubb 2y ago
  the fed typically aims for 2% inflation because if they aim for 0% inflation, the economy may experiencr deflation. if you get stuck in a deflationary spiral, it's very hard to get out also since 2% is the typical target, they have a little room to lower rates and stimulate the economy, such as what happened in covid
  • Aerbil313 2y ago
    There are alternative theories as to why FED keeps inflation at %2, despite what they say. It's a rabbit hole. https://wtfhappenedin1971.com/ https://wtfhappenedin1971.com/
• usefulcat 2y ago
  It also reduces the value of debt.
  • HPsquared 2y ago
    Interest rates are usually set above inflation.
    • usefulcat 2y ago
      Naturally, but for all pre-existing, fixed-rate loans, that is no help for lenders when inflation goes up.
• redblacktree 2y ago
  Even if it isn't designed this way, it's a welcome benefit to many.