[quote=AN][quote=CA renter] Our current problems are a result of too much leverage and the resulting elevated prices. Deflation would solve those problems very effectively.[/quote]
Wouldn’t inflation solve the problem as well? If everyone make 2x more than what they do today, wouldn’t the debt they have current be much more manageable?[/quote]
You’re making the assumption that “inflation” will show up in wages. It doesn’t have to work that way. Inflation can go anywhere, but with globalization and the decimation of unions (who were the primary drivers behind the wage increases in the 70s), there is absolutely no reason to think that wages will rise. What’s more likely is that asset prices rise (because investors will invest in hard assets/commodities to protect their wealth) while workers’ wages stagnate or decline. Workers would lose purchasing power while the wealthy elite see their relative wealth grow with inflation. It’s really the worst of all possibilities, IMHO, and why I’m such a fan of deflation.
Deflation is the only thing that can help reverse the wealth disparity that has been caused by decades of inflation and globalization. If we’re ever to achieve the greatness that we once had, we need to reward *work and productivity* not gambling/”investing”. We can do this by increasing taxes on investment income while lowering taxes on wages. We should also eliminate “free trade” and engage only in fair trade with countries who have the same environmental and worker protections that we do. We need to allow risk and reward to be aligned by requiring corporations to have their top compensation tied to the compensation of all their workers. If the executives don’t like it, they can throw off the reins of corporate protection and take all the risks personally; that’s how they can *earn* the rewards they seem to think they deserve.
Note on the graph how wealth/income inequality rises during inflationary times and falls during deflationary times.
IMHO, we are being fed a pack of lies about inflation/deflation (by the wealthy who control the media and political battleground — “Dems vs. Repubs/left vs. right” are simply meant to divide and distract us). We’re told to believe that deflation is the bigger worry when (IMO) inflation is what kills us.
