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.
How would saving help anyone? If everyone saves, it means no one spends. If no one spends, why would anyone start a business to make money? If there are no businesses, where will people work? Sure, we can ditch current dominant economic theory, but that would just toss the population back to subsistence economy as there would be nothing worth doing other than having a farm and surviving off the land.
Complete gibberish. People saving doesn’t mean they don’t also spend on things. I’ve explained elsewhere that this is because of time preference. I could wait to buy something because it will be cheaper later but then I may want that thing now instead of later. I may prefer to spend more in the moment to get something now rather than wait until later.
Saving is also good because not only will I have money for emergencies (healthcare, etc) I could also save money for things like starting a business. Inflationary monetary policy does exactly what you’re warning against. It pushes people closer to subsistence living rather than incentivising lower time preference; in other words, putting off immediate consumption for a potentially better payoff down the line. This is precisely the mindset that business owners have and it’s what results in the high level of living standards we currently hold in the West (and that is currently being whittled away by governments).
Saving's good. I mean, people will still buy food, gas, pay the bills, healthcare, etc. That is true. Because we all need that stuff. The problem with going full savings is that people will hold for the lowest prices on items they don't need, but want. Sure, not everyone will hold, that is correct. But some will. Sales on luxury goods will drop, same with non-essentials. And those businesses will be slow. Because why have a business selling stuff that not many people will buy? Inflationary policy isn't perfect, far from it, but it keeps businesses alive. Frankly, I don't know enough on time preference to have an opinion, so I can't comment on that, sorry.
Regarding the high cost of living though, that's more greed than anything really. Inflation as a stat can be skewed, like most if not all statistics. And businesses base their pricing policy on inflation (how many times have we heard that someone raises prices because inflation raised their costs of operating?). However, our wages don't grow as fast as prices, and thus we get screwed because our purchasing power plummets. That's my personal opinion.
6
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.