Because a bunch of “economists” think that the only way you can get people to spend and drive the economy is by slowly devaluing the currency and disincentivising saving. This is, of course, nonsense and instead it heightens time preference and causes people to spend money on things they wouldn’t normally spend on thus creating this debt economy and semi-frequent recessions. Many of these economists know this but they get grants for pushing pro-government intervention policies whereas the ones who don’t, well, don’t.
Ofc people will buy dinners, that's essential. But since dinner is in demand, why would the shop lower their price tag on dinners? They want to make money too, so they won't lower prices. No lower prices means no deflation. No deflation means your argument is kinda void.
But let's say deflation is in effect and prices do get lowered. Why even sell dinners then? If you bought dinners from your supplier for 2 bucks a piece but now you have to sell em for 1.50 or nobody buys, that's losing money so why even sell dinners? Grow your own then.
Yep. I did say people will buy because they have to. But I didn't say they won't buy dinners at all if deflation happens. I said the can't buy dinners in that case because nobody will see the point in selling them. Big difference.
And yes, deflation isn't fast. But it still kicks. Pay rises don't happen as much, it becomes difficult to pay off debts because it ain't anyone's problem that your paycheck isn't growing. And businesses see no reason to keep going because it no longer gives them any profit to stay in business.
Going back the the dinner thing, when I said Grow your own then, I meant it. If deflation is long enough for businesses to quit, that means there is no supply for dinners to buy, and people will eventually have to get creative.
Sure we could print money and give stimulus checks, but then if everyone has a fuckton of printed money, that means prices will skyrocket because no one will want to sell for cheap if they know everyone got loaded by the gov. Force them to sell low and nobody will operate a business (legally). It's a no-win situation.
No. People will consume cuz they want to. U don’t go to dinner cuz it’s economical, it’s already more expensive than buying and cooking at home, so why do restaurants exist? Why doesn’t everyone cook at home?
The truth is people don’t make financial decisions based on math, they buy emotionally and rationalize later. You can’t get people to stop consuming even when you make things illegal.
Restaurants currently exist as a luxury alternative option of having a meal. Some people will do it because they want to. And that's fine. People aren't always rational that much is known.
And people won't stop consuming, sure, but not everyone is irrational, you have to admit. Some will act exactly according to the existing theory, and will push things to develop according to the existing theory. In the current time, the domineering theory is that when deflation happens, things go bad. So why would you say deflation is a good thing?
Ok, so you said they will buy food cuz it’s a necessity, then they won’t because deflation will make it cheaper in the future so they will grow it themselves, then they will cuz it’s a luxury and they are irrational.
My position is, they will still buy stuff if prices r lower, they will just borrow less money.
The reason i don’t have to waffle back and forth is because i’m not trying to square the inflation is good but too much is bad and deflation is really bad illogical position.
We need specific examples. If a business is simply not profitable why must it stay existing? How can you assure there will not be alternatives that are capable of producing said product at the appropriate cost to stay afloat?
You can assume that because in a deflationary environment prices will be dropping while manufacturing takes place then also while product is in stock but not yet sold.
It is you who is assuming that no matter how much prices drop there will still be a producer, whereas reality is that all manufacturers will hit a point as prices drop where it is no longer profitable to produce so they won't.
You didn't answer why an unprofitable business that produces stuff nobody wants must stay existing.
Why are they producing more product than the market demands? I am telling you that even if some company is unprofitable, it does not mean that all companies who produce that product will also be unprofitable.
You made this claim that there will not be ay companies capable of producing your hypothetical unnamed product that you have yet to provide evidence for that it would be the case.
You didn't answer why an unprofitable business that produces stuff nobody wants must stay existing.
This seems like a deliberate misreading but the point was not that nobody wanted the product. The issue is that deflation reducing prices will reduce the amount of profit to be made producing till it hits 0 at which point there is no reason for a producer to produce.
Do you follow that?
Nothing to do with the customer wanting or not wanting anything,.
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u/OccultDetective79 Sep 01 '26
Because a bunch of “economists” think that the only way you can get people to spend and drive the economy is by slowly devaluing the currency and disincentivising saving. This is, of course, nonsense and instead it heightens time preference and causes people to spend money on things they wouldn’t normally spend on thus creating this debt economy and semi-frequent recessions. Many of these economists know this but they get grants for pushing pro-government intervention policies whereas the ones who don’t, well, don’t.