6 ms·
> The idea that 2% inflation is good for the economy, and deflation is bad smacks of the government selling the idea because increasing government spending via
by kldavis4 3y ago
> The idea that 2% inflation is good for the economy, and deflation is bad smacks of the government selling the idea because increasing government spending via inflation is a way to raise taxes without raising taxes.
I think the premise is that deflation is much much worse (and not amenable to the available controls that the Fed has available) and it is pretty impossible to reliably target < %2 inflation, so effectively the idea of "2% inflation" is the minimal possible amount of inflation.
- WalterBright 3y agoBefore the Fed took over the banks, 0% inflation was common and normal. Inflation netted out to zero for the previous century. The very first year after the Fed took over, endemic inflation settled in. > and not amenable to the available controls that the Fed has available We had deflation in the Great Depression because the Fed did not understand their role in creating money.