Why?
Because your money is worth 3% more each year yet your mortgage payment remains the same.
In 7 years my house is paid for.
That's excellent! What about the other 10s of millions of home owners where that is not the case?
They'll simply do so to the extent profitable without being able to fob off their costs on savers who don't enjoy their profits anyway.
You're funny.
Actually, savers would benefit because the purchasing power of their savings would rise considerably.
Just like all the savers did during the Great Depression. When unemployment jumped to what, 25%?
'Deflation' of prices subsequent to productivity increases
Except we aren't discussing those types of price drops, just the deflationary ones.
1945 as a percentage of GDP.
Sorry, FDR ended the gold standard in 1933
Sorry, the gold standard lasted until Nixon.
When specie redemption is forbidden by law you no longer have a gold standard.
And we'll never have one again.
As an aside, do you look favorably on FDR's gold confiscation and inflation measures as effective depression fighting tools?
I don't like confiscation and they didn't do enough to fight deflation, obviously.
Why?
Because your money is worth 3% more each year yet your mortgage payment remains the same.
So you have a mortgage payment that is 100% of your income? I think I found your problem, like too many Americans, you're over leveraged and want Bernanke to bail you out with his printing press.
That's excellent! What about the other 10s of millions of home owners where that is not the case?
For the over leveraged there is a process we call bankruptcy.
Just like all the savers did during the Great Depression. When unemployment jumped to what, 25%?
The Great Depression was a confluence of several factors. The implosion of the credit bubble fostered by the Federal Reserve's credit distortions (themselves an effort to help the Bank of England fake a return to the gold standard after using inflation to pay for WWI), Hoover's tax increases (tariffs and income taxes), as well as his assault on profits. FDR's continuation and exacerbation of these policies, including trying to arrange prices throughout the economy and cartelization of business.
At any rate, the increase in savings was the foundation of emerging from depression, and followed, not preceded, it. Hence, not causative.
Except we aren't discussing those types of price drops, just the deflationary ones.
But that is precisely the kind of deflation that exists in under a gold standard. As productivity increases the supply of goods grow faster than the stock of gold, prices relative to gold will decrease.
Sorry, the gold standard lasted until Nixon.
No, the gold standard ended with FDR outlawing the private holding of gold. No longer could the market act as a restraint on the creation of money, it was entirely in the hands of politicians. FDR, and the Bretton Woods agreement, left one 'loophole'. Foreigners could exchange their USD for gold. When the inflation of dollars to pay for the Vietnam war and the Great Society became obvious to the rest of the world this 'loophole' was closed, before the game could be exposed. We entered an era (post-Bretton Woods) of competing fiat currencies.
When specie redemption is forbidden by law you no longer have a gold standard.
And we'll never have one again.
You should study history. Princes have tried the paper money trick repeatedly through the centuries. It has always ended in tears for the public, and an eventual return to sound money until the harsh lessons are forgotten.
The Founders actually forbid the States from printing money precisely because they had experienced the deleterious effects of paper currency. Madison even specifically cited it in Federalist #10, "A rage for paper money, for an abolition of debts, for an equal division of property, or for any other improper or wicked project, will be less apt to pervade the whole body of the Union than a particular member of it..."
I don't like confiscation and they didn't do enough to fight deflation, obviously.
Printing money isn't a solution to the misallocation of resources. It only serves to enrich those who first get their hands on it, and distorts prices, masking genuine profit and loss and thereby thwarting and delaying the reallocation of resources to productive (profitable) ends.
I encourage you to read about the money printing engaged in by the colonies. Or by the French under the guidance of John Law. The consequences read like the headlines of the last few years, property bubbles and all...