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This is trying fit a deflationary currency into a debt/consumption driven economy. Who says the best way to drive the economy is by taking on debt to consume g
by mpg33 13y ago
This is trying fit a deflationary currency into a debt/consumption driven economy. Who says the best way to drive the economy is by taking on debt to consume good and services? I would argue that debt counteracts a lot of the gains set by consumption.
The falling wages argument seems irrelevant...what's the difference between wages increasing 2% to keep up with 2% inflation and decreasing wages 2% to keep up with 2% deflation. Don't confuse numbers with value.
I would argue however that the RATE of deflation is important. 90% is brutal...2% not so bad. Theoretically the rate of deflation of bitcoin's should decrease as time goes on.
- Ashendar 13y agoEven in a non-debt driven economy debt plays a useful role at a micro level in terms of financing productive investment, not just discretionary consumption. Deflation will increase the real value of debt, making it increasingly difficult to service the debt over time (since your wages would probably be falling), whereas inflation reduces the real value of debt over time.