No deflation is a systemic crissis, tech is a bad point becasue of optimization of costs and manufacturing. But think a 10$ shirt, it will cost 9$ the day after, then 8.50, then 8 etc why would you ever buy a shirt unless you absolutely have to?
Let's say you can afford a 10 buck shirt, but it hurts. But if you now know that prices are steadily going down, why wouldn't you hold out until it costs only 7 bucks? Then you would have 3 bucks left to spend on something else!
It finally goes down to 7, and you think, it went down so far, maybe if you wait a liiiittle bit longer it might drop a little more. If it stops dropping, you'll buy it at 7, but imagine it dropped to 5! You'd have like 5 bucks over!
And then it goes to 5, and maybe it will drop some more and it will be an absolute steal. You can wear the ratty shirt you have a little longer.
This is taking place over several weeks or even months, where you don't buy that shirt. And so do tons of other people trying to save money. Meanwhile the retail stores and manufacturers are freaking out because no one (meaning not enough) people are buying shirts and their revenue goes down. They have to stay afloat somehow. So layoffs. And suddenly the pool of people who need to watch their money and for whom 10 bucks for a shirt would hurt is much larger. Couple months ago, they had the income that they'd just go into a shop and pay whatever for a shirt, but money is tight now. But! Prices have been consistently going down, so they can wear that ratty shirt a bit longer, just to see if maybe prices go down further...
And this isn't just a shirt industry crisis. This happens simultaneously with all things everywhere around you. So you personally know ten people who have recently been laid off and can'tfind work because seeminglyno kne is hiring. So you fret about getting laid off at some point, so you try to safe and keep spending down. Thank got prices are steadily going down. If you wait a bit to buy that stuff you want, it will be much cheaper!
So deflation would force the 1% to pool money back into their companies, but they lay people off instead not to lose a fraction of their money that already surpasses multiple countries' whole ass wealth.
Deflation is only 'bad' it looks like, because only the select few are worthy to hoard money, your regular Joe with minimal wage can kick rocks.
Even if then 1% were to pool their money into companies, it wouldn’t magically fix the problem.
People have expectations on inflation/deflation and that creates a self perpetuating cycle. Employees would be willing to accept less pay and consumers would be willing to continue delaying purchases, not to mention the various problems that would have caused deflation in the first place
1
u/Zealousideal_Act_316 7h ago
No deflation is a systemic crissis, tech is a bad point becasue of optimization of costs and manufacturing. But think a 10$ shirt, it will cost 9$ the day after, then 8.50, then 8 etc why would you ever buy a shirt unless you absolutely have to?