r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/nebileyim_ben 9h ago

its deflation, prices keep falling over time.

japan experienced long periods of deflation which is hurt spending and as a result affected economic growth.

its super hard to fix that bcs of liquidity trap.

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u/Terpcheeserosin 8h ago

Why does things costing less make people buy less?

If wages stay the same, shouldnt people just buy the dip?

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u/Poland-lithuania1 8h ago

It isn't things cost less, it's money can buy more. Isn't it better to save that money for the future, when it's probably gonna be able to buy more?

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u/Thin-Leg-3494 6h ago

If you could buy a car for $10,000 today but if you waited a month you could buy it for $9,000. Would you buy it today?

Based on the 2008 recession and the 5 or so years following no one had the jobs, capital, risk appetite to really buy like that even if they wanted to. Historically America and Americans have been piss poor at saving for a rainy day.

Deflation would be absolutely devastating for the US.