r/PeterExplainsTheJoke • u/Melodic_Judge_129 • 9h ago

Meme needing explanation Petah?

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u/IrksomFlotsom 8h ago

Try and think of our global system as an engine that's purpose is to make fuel for itself. It needs to keep it's input above the output in order to keep powered on. As soon as the input drops below output the machine starts to slow down and can no longer sustain itself. The engine is not designed to slow down so it very quickly breaks down

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u/Gentle_Snail 8h ago edited 8h ago

Deflation can also result in a very negative feedback loop, the Great Depression was a deflation spiral for example.

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u/Mayor_Death 7h ago

Is deflation a cause or symptom, though? To me, it’s just a number, but I understand that it is more than that to various economic groups.

As far as I understand it, deflation indicates that prices are going down, which is a good thing to me individually.

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u/GlowUpper 5h ago

The problem with deflation is that people stop spending money (outside of essentials). Why buy a TV for 1200 when it will be 1000 next week. 

Sounds great in theory if you're a consumer but when people stop non essential spending, recessions start. People get laid off, less money is spent, more people get laid off, and around and around.

There's a reason recession recovery packages almost always involve direct payments to the working and middle classes. Get people on the bottom rungs spending money again and it (theoretically) should result in hiring more workers, which gets more people spending money, etc.