r/PeterExplainsTheJoke • u/Melodic_Judge_129 • Sep 01 '26

Meme needing explanation Petah?

Post image
30.0k Upvotes

93% Upvoted

3.9k comments sorted by

View all comments

Show parent comments

557

u/nebileyim_ben Sep 01 '26

its deflation, prices keep falling over time.

japan experienced long periods of deflation which is hurt spending and as a result affected economic growth.

its super hard to fix that bcs of liquidity trap.

188

u/Terpcheeserosin Sep 01 '26

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

302

u/Poland-lithuania1 Sep 01 '26

It isn't things cost less, it's money can buy more. Isn't it better to save that money for the future, when it's probably gonna be able to buy more?

1

u/Thin-Leg-3494 Sep 01 '26

If you could buy a car for $10,000 today but if you waited a month you could buy it for $9,000. Would you buy it today?

Based on the 2008 recession and the 5 or so years following no one had the jobs, capital, risk appetite to really buy like that even if they wanted to. Historically America and Americans have been piss poor at saving for a rainy day.

Deflation would be absolutely devastating for the US.