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> A gold standard means that when the economy gets overheated it pops, then contracts and you get deflation. This makes crashes last longer and harder. It requi

> A gold standard means that when the economy gets overheated it pops, then contracts and you get deflation. This makes crashes last longer and harder. It requires greater fiscal discipline to overcome. Kenyesian economics, through inflationism and fiscal policy, has been trying to solve this problem since the New Deal. When they actually make any progress on that front, why don't you let me know?

citadel_melon 2y ago
This is me letting you know that Keynesian economics solved deflation, making it less difficult to get out of market contractions (Note, the comment you refer to specified specifically deflation to be an issue, and did not claim that it solved bubbles and poppings completely nor reduced their frequency). The last time the US had faced significant deflation has been 100 years ago. We used to face deflation much more frequently before Keynesianism since our country’s founding. Inflation sucks but deflation is a death spiral. There is some more nuance, but most economists would agree that deflation is a lot scarier in general than inflation due to its feedback loop. Moreover, the reason why we keep getting rampant inflation is more due to neoliberalism and neoconservative economic/fiscal policy rather than modern monetary theory and Keynesian monetary policy. If anything, these monetary policies have massively reduced the amount of inflation we have been feeling for the past several years.
- desumeku 2y ago
  > Inflation sucks but deflation is a death spiral. Do you actually have any evidence for this? Considering that we haven't experienced deflation in nearly 100 years, and all. The USA certainly wasn't "death spiraling" before we went off the gold standard, quite the contrary. But now it seems we are.
  - lxgr 2y ago
    Because the kind of USD used in global trade (Eurodollars) has been decoupled from the Fed and its gold standard for a while before Bretton-Woods was abandoned through various mechanisms.

citadel_melon 2y ago

This is me letting you know that Keynesian economics solved deflation, making it less difficult to get out of market contractions (Note, the comment you refer to specified specifically deflation to be an issue, and did not claim that it solved bubbles and poppings completely nor reduced their frequency). The last time the US had faced significant deflation has been 100 years ago. We used to face deflation much more frequently before Keynesianism since our country’s founding. Inflation sucks but deflation is a death spiral. There is some more nuance, but most economists would agree that deflation is a lot scarier in general than inflation due to its feedback loop. Moreover, the reason why we keep getting rampant inflation is more due to neoliberalism and neoconservative economic/fiscal policy rather than modern monetary theory and Keynesian monetary policy. If anything, these monetary policies have massively reduced the amount of inflation we have been feeling for the past several years.

desumeku 2y ago
> Inflation sucks but deflation is a death spiral. Do you actually have any evidence for this? Considering that we haven't experienced deflation in nearly 100 years, and all. The USA certainly wasn't "death spiraling" before we went off the gold standard, quite the contrary. But now it seems we are.
- lxgr 2y ago
  Because the kind of USD used in global trade (Eurodollars) has been decoupled from the Fed and its gold standard for a while before Bretton-Woods was abandoned through various mechanisms.