The shoes are still being bought. They just have better value for the customer than the company in this. The threat of firing workers only goes so far when they fire people anyways and will always need workers. Its not a company if they fire 100% of the workers.
If the debt was being paid back exclusively in loafs of bread this would be bad. But it just shows that in the long run it becomes easier to pay it back because more of the money is able to be put towards the debt
Who is going to buy a product today if it’s going to be cheaper tomorrow? Only the people who absolutely can’t do without, and there is not that many of them. Consumerism is the driving force of all modern economies, and it’s partly driven by the fact that waiting to buy something is just going to drive its price up because of inflation. That’s why a lot of people would rather buy on credit than save for a purchase.
I apologise for making a practical example in the hopes that it would make it easier to understand why deflation is bad for anyone who’s indebted.
So I support people being able to buy necessities with increasing value and ease more than I support consumerism and the constant push to make people buy things they don't need
I appreciate the perceived weight of the dangers of debt. I'm saying it is a perception and deflation would make it easier to get out of debt. The debt would feel heavier but paradoxically would be easier to get out of.
What you don't seem to understand is that selling stuff is how businesses generate revenue. This isn't about one person making a decision not to consume, but an entire population. At these macro scales, individual decisions quickly add up and cause businesses to let go of their workers at scale.
So the unemployment rate goes up. As this happens and more and more people get into economic hardship, consumption will slow down even more, leading to additional job losses. The Great Depression for example, a period of massive deflation, had an unemployment rate of 25%. And the people that did have jobs got severe wage cuts or were underemployed.
So stuff getting cheaper doesn't mean that you will be able to afford more. Quite the opposite actually.
People hear deflation and think they get more buying power and that the effects stop there. The armchair economists in here are scary because all it takes is another idiot like the current president to get in power and think they know better about, say, deflation, and wreck everyone’s shit because they don’t know better. Japan has had deflation problems and there are countless studies out there about all the problems it has caused. I promise you, no matter how good anyone thinks deflation is, it’s the opposite & worse
Plus Japan’s contraction was buffered by them exporting a lot of their production, which saved a lot of jobs, and by demographic collapse, which meant fewer people needed the jobs that were being shed when companies just didn’t replace employees who quit or retired. They also have significantly different attitudes about corporate responsibility that meant companies would keep employees who weren’t necessary on staff because it was the socially expected thing to do.
None of that is true of the US. Their president is rapidly making their exports toxic to the rest of the world, demographic collapse hasn’t really taken hold, and corporations fire people to make their quarterly numbers look better.
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u/thevoidthatjerksback 8h ago
The shoes are still being bought. They just have better value for the customer than the company in this. The threat of firing workers only goes so far when they fire people anyways and will always need workers. Its not a company if they fire 100% of the workers.
If the debt was being paid back exclusively in loafs of bread this would be bad. But it just shows that in the long run it becomes easier to pay it back because more of the money is able to be put towards the debt