As the Austrians point out, deflation in real terms (not inflicted by the Federal Reserve) is actually a result of the innovation of the free market and the creation of wealth (as individuals create wealth, things become more affordable... think of the cost of a brand new technology, like DDR3, as time progresses, it comes down). So, you are right, we should experience a general deflation as innovation creates wealth, making things more affordable for all. (this includes things like healthcare).
Eric On Tue, May 18, 2010 at 3:13 PM, Technomage <technomage.ha...@gmail.com>wrote: > On 5/17/10 4:13 PM, Joshua Zeidner wrote: > >> >> >> you might see some kind of short term deflation, but any substantial >> deflation would break us. Any time you have debt, then deflation makes that >> debt harder to pay. Not only would it be tragic for Americans on a personal >> level, but on a state and federal level it would be equally disastrous. eg. >> What would happen if everyone's salary were halved next week? Massive >> default on mortgages, housing inventory increases, values go down, etc. I >> would think that deflation might be beneficial, I just don't think its an >> option (either financially or politically). Most likely they will just >> print their way out of this, and destroy the dollar in the process. >> >> -jmz >> >> I have been reading through this and as someone who has an accounting > background (thank you GCC), > you all have not mentioned one important fact: the rate at which deflation > could (or would) occur. > > A low rate (say under 2% would have minimal effects on the economy in the > very short term, it would > start making life a litte more difficult with time, but not substantially > so. IF, however, the rate if deflation went up > or varied wildly over the long term, yeah,, I could see the above scenarios > coming to pass. > > The biggest problem with have in this country is a lack of personal > responsibility for ones own actions > (including incurring debt). we need to be a lot more responsible and we > need to force the states into > doing so at their level. 5 years ago, Arizona had 2 billion in excess cash > set aside (call it a rainy day fund). > the politicians couldn't leave well enough alone and now here we are, > suffering a 2.1 billion dollar shortfall > for this year alone. California was living on borrowed time ever since gray > davis started as governor. > > Personally, I have gotten rid of all my credit cards (can't have them > anyone living on a disability income), > I am paying down any debts I have left (just over $3,000 at this point) and > will be debt free in 3 years. > > I view credit as nothing more than a company selling you the money you > borrow (debt) and then charging you > monthly to be able to use that money. it isn't yours. its a legal scam IMHO > > anyway, my point is this: deflation might actually be a good thing for this > country, if and only if, it can > be held to a minimum level for as long as possible. > > > --------------------------------------------------- > PLUG-discuss mailing list - PLUG-discuss@lists.plug.phoenix.az.us > To subscribe, unsubscribe, or to change your mail settings: > http://lists.PLUG.phoenix.az.us/mailman/listinfo/plug-discuss >
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