Re:Central bankers rethink their devotion to slaying inflation
by Steko on Sunday December 23, 2012 @05:24PM
(#4960917)
"There's also a strong case for deflation ..."
No there isn't. There's some fringe people like your citation that try and make the case but they're on the fringe for a reason.
Deflation is bad because if I can get more from my dollar tomorrow then I shouldn't buy your goods which means you shouldn't produce as many. This begins a downward spiral that leads the economy into recession/depression.
Now if you want to completely rebuild the economy from the ground up including the way investment, debt, currency and wages work you could probably do it so that deflation wasn't terrible but there's no evidence you won't end up breaking something else in the process (cf Law of Unintended Consequences). Meanwhile back in the real world we live in, deflation still sucks.
No there isn't. There's some fringe people like your citation that try and make the case but they're on the fringe for a reason.
Deflation is bad because if I can get more from my dollar tomorrow then I shouldn't buy your goods which means you shouldn't produce as many. This begins a downward spiral that leads the economy into recession/depression.
Now if you want to completely rebuild the economy from the ground up including the way investment, debt, currency and wages work you could probably do it so that deflation wasn't terrible but there's no evidence you won't end up breaking something else in the process (cf Law of Unintended Consequences). Meanwhile back in the real world we live in, deflation still sucks.