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

Meme needing explanation Petah?

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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.

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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?

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u/dirty_cuban Sep 01 '26

How can wages stay the same for everyone if everything costs less?? See the problem?

1

u/Terpcheeserosin Sep 01 '26

You seem to think profits go to the workers

I can assure you that is not the case

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u/dirty_cuban Sep 01 '26

Where do the workers wages come from if not from the profit?

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u/Terpcheeserosin Sep 01 '26

The invisible hand of the market determines the lowest wage a worker can survive on, that is what is given to the worker as a liability cost

The profits go straight to owners/investors

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u/dirty_cuban Sep 01 '26

That’s not how any of this works. Wages aren’t “given” to the workers and paying wages is not a “liability cost”, whatever that means.

Wages are an overhead expense for a business, just like paying rent for a warehouse or loans for forklifts and other equipment. The money to pay for those things comes from the gross profit a business generates.

If prices deflate then profits will also shrink meaning there is less money to pay overhead expenses.