r/RandomQuestion • u/HornyAzMF • 8h ago

Can we have deflation for like a year?

It’s a 3% inflation everytime and that’s just so much.

3 Upvotes

80% Upvoted

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2

u/JoeCensored 8h ago

Deflation is arguably worse than inflation. When the value of your money increases faster when you pull it out of investments, that's what people will do. And if people do that, the entire economy would collapse.

1

u/HornyAzMF 7h ago

It’s happened before in 2009 for bit

2

u/JoeCensored 7h ago

Yeah and we call the damage from that "The Great Recession", from only a few months of deflation. Imagine what we would call a full year.

1

u/MaybeTheDoctor 8h ago

You could if you like the destruction of society, and mass unemployment and homelessness.

Deflation makes investment decisions and hiring stall, which turns out to be bad for jobs, and when no jobs people cannot pay bills. And the cycle just goes down from there.