It means price can't go up anymore because ppl can't afford, businesses need to slack ppl off to stay afloat, which make ppl poorer and even less capable of buying stuff.
As bad as it is right now companies are still making money, it's a tight labor market absolutely but this is nowhere close to mass unemployment. When everyone needs a job and all the companies are broke because literally nobody is buying anything it would be significantly worse than our current situation. This would absolutely not be good news by any measure
Companies, at least the larger ones, aren't making profits. They're basically just pumping stocks. No one has a job right now, and no one's buying anything. The entire global economy is just running on assets going up. There are literally no drawbacks to deflation anymore. The only thing that would happen is that stuff would stop getting more expensive.
I don't even know where to begin but you did not live through the 2008 recession if you think nobody has a job right now. As bad as today's economy is, and no one is arguing its good, it's not even close to an actual recession. Unemployment at the peak of 2008 was over double what it currently is. "There are literally no drawbacks to deflation anymore" the economy will crash, businesses will close en mass, large corporations will be protected by the government while everyone else will go broke. The value of ANY debt you have will increase in real terms while you would be lucky to get a pay cut if not lose your job entirely, so you'd be paying 10% higher in real money while making 10% less in real wages. There is a reason the only real deflationary periods in modern US history have been during recessions.
Honey, we all lived through Covid. Do you really think 2008 unemployment numbers scare anyone anymore? As for the debt and not really making "real" money, this is literally happening right now.
It's like me saying I earn 0 dollars and you arguing that during deflation you will earn 1000 times less. Real scary shit there bud. Not being able to eat because you can't afford it and not being able to eat because no one's making food are still the same thing at the end of the day lol.
Economic growth basically only matters to businesses and governments.
And even then, Japan managed to do quite well with decades of deflation.
Also, I was there in 2008 and guess what, the world didn't end and we're all alive.
The median american is earning 65k a year; you might not have a job but unemployment is not over 10%, so no "everybody" is not broke and unemployed. I don't know where you get your condescending tone but people's lives were literally massively affected by 2008 to the point where it's still felt today.
It's not like saying you'll earn 1000x less if you're unemployed, because the average american needs to pay rent and eat and they're working to do that; your unique work experience does not mean that the average american would have the same experience.
"And even then, Japan managed to do quite well with decades of deflation." Japan is famously not doing very well, people have had literally stagnant wages for decades, and they're about to have a bond market crisis because for decades they've been attempting to inflate their currency away to prevent that deflation from getting worse. Possibly the worst possible example you could've brought up barring the Great Depression.
Also if you have any kind of debt at all (mortgage, credit card, student) you should never ever want deflation or you are 100% cooked financially.
Again, I'm not saying everyone's unemployed right now, and I know what costs of living are. Do you know what a metaphor is?
AND I'm not just talking about the US here. All I'm saying is that the majority of the global economy isn't based on people making stuff anymore, but on investment. I'm saying that the average person isn't really affected by deflation the way you think they are.
Deflation basically means no one buys anything -> companies don't make money -> people are laid off -> no one buys anything.
The only thing I'm saying that under the current inflation market, all of these things are already happening. The only thing that would change is that companies couldn't make imaginary gains as easily for their shareholders. And the more this continues happening, meaning that the more wealth gets concentrated to a few individuals, the less it will matter if its deflation or inflation except if you're very rich.
If we started calling our economy a deflation economy tomorrow literally nothing would change except economic outlooks.
And don't get me started on poor Japan with its insanely high standard of living and its place as the forth largest economy. Those poor people...
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u/SuspiciousSnotling 9h ago
Deflation is worse than inflation.
It means price can't go up anymore because ppl can't afford, businesses need to slack ppl off to stay afloat, which make ppl poorer and even less capable of buying stuff.
It's a death spiral