Hobbits disagree with you on that. Also banks pay interest on savings accounts. Arguably the richest already are on the do nothing train. Deflation would just allow for everyone to benefit from that
The banks pay interest on money in a savings accounts because that money is being lended to someone else, who then pays interest repaying the loan. The money is absolutely not sitting there “doing nothing.” This is the foundation of capitalism: I provide you with capital to deploy it creating value, and you reward me for providing that capital by paying me back more than I lent. It incentivizes deploying capital to create value.
A deflationary spiral destroys this engine, because now even if I do nothing, I win. Deployment of capital for some investment doesn’t just have to compete with other possibly ways of deploying the capital, it has to compete with doing nothing. And as less capital is deployed and the engine slows further down, the harder and harder it becomes to see a return on deployment of capital over the return of doing nothing.
Put differently: the only way deflation happens at economic scale is exactly because people have stoped spending. I only lower my prices for good because there is no demand at a higher price. If there was demand, I wouldn’t need to lower my prices to convince people to spend their money.
I understand capitalism. I do not like capitalism. Deflation destroys capitalism. I'm fine with this. You have not explained why or how it would destroy economy. It just destroys the ability for the rich to dictate and control the world through capital
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u/thevoidthatjerksback 8h ago
I doubt that anyone could explain this in a way where I would accept deflation as worse