I don’t know how this will work. I’ve been ‘educated’ to think deflation is much worse than inflation. So, raising incomes may be the only option.
I’m not an economist, so I don’t understand these things. Oratam only pawn in game of life.
I reckon it is. Ronald Reagan's Admin took a few years to normalize Jimmy Carter's inflation - but we returned to a comfortable economy... and he won his second term in an historical landslide: won 49 states!
Trump has no other term to wait for and campaign for. He wants quick results. I am not very confident that this is a good idea, especially when the Sec of Treasury says they are cutting spending while raising the debt ceiling $5 trillion for two years. $42 trillion to try to pay off ... for how long? Or will we continue to keep kicking it up until it looks like spilled spaghetti? ❓
Great reference, thank you. Here's a Laurel.....and Hardy handshake.
1) Our money is fiat based on debt and we are a debtor nation. If the value of money deflates then the cost of debt rises and the asset value behind that debt goes down. Savers though gain value so they don't want to spend because they know they can buy it cheaper in the future, and as a result economic transactions slow and it becomes a loop of destruction to the economy.
2) Raw materials previously bought cannot be recouped in the final product when it's built later in time.
Inflation is considered good for the same reasons - asset values go up (even with wear over time) against previous debt reducing the overall cost of the loan over time. However, savers lose the value of their money over time in this environment so saving isn't promoted, and everyone goes into debt slavery or invest into ‘growth’ assets.
However, in a solid money system everything is different. Assets are locked in value for the most part, except for any degradation over time. Savers retain value while borrowers lose value due to the cost of borrowing. Investments are more meticulously looked at to determine if they are worth more than just saving and so growth is slower with less stuff being thrown on the wall to see if it will stick.