Deflation Might Just Be a Good Thing

Reader Comments
Back to blog

Deflation can lead to a drop in wages. When this happens, your long-term debt, like your mortgage, will become more expensive.

vince of WA 2:31PM February 17, 2009

The philosophical issue Obama mentioned is that people with savings will have their savings completely destroyed by the amount of inflation caused by such actions. It's a less obvious way of going into everyone's savings account, forcibly removing the money, and giving it to everyone else.

Terrence Kwasha of GA 8:04AM February 13, 2009

Welcoming "a bit of deflation" is like welcoming "a bit of hurricane": there's no way to control it once it's unleashed, and there's no way to know how much damage it's capable of doing. Anyone looking forward to deflation as a time of great bargains and lower prices needs to talk to their grandparents to find out the real story of the Great Depression.
Basically, the pain everyone is now feeling watching the value of your houses stagnate and fall will be replicated ten times over if this foolish author gets the "bit of deflation" she's thoughtlessly cheering for.

RB of VA 2:15AM January 01, 2009

stan, maybe you are one of those greedy "I sold my soul to baal" wall street fat cats grunting, squealing, and sniffling like fat porkers for pennies on the street or one of those brainless idiots from the right wing evangelical christian factions of the republican party.
great opinion bonnie erbe!

ergonomy of MO 9:48PM December 21, 2008

A dollar in 1910 is worth about 3 cents today due to inflation. I'm not scared of deflation. The government prefers inflation because it can control the economy by printing money to spend on whatever it wants, and the private banks called the Federal Reserve are in on it, too. They can issue debt whenever they want on a promise to pay in the future. When that promise is not kept, the dollar loses more value. It's unfair to the responsible, honest people who save their money.
Niether inflation nor deflation is a good thing, but you will only hear the media and the government ever gripe about deflation, but it does not favor them.

Curry Taylor of OR 1:12AM December 21, 2008

I vote Yes... but could we add two things, while this lasts!
since everyone is calmoring for US Treasuries, especially foreign individual investors it's reported, can we repackage the soc sec tust Fund's bonds into short term T notes THEN take the cash and buy stocks, while the dollar is also high, in overseas markets where growth is most promising and the demographics the opposite of ours (to balance things out) and consumerism hasn't, but will, become a new thing not a tired thing.
plus go back to defending the US instead of policing the entire world (cut the Pentagon budget, we can do it gradually)....and maybe e can stay out of so much trouble too not just save money.

Steve of NY 8:29PM December 19, 2008

Actually your the first one who has hit it on the nail. The federal reserve has made everyone poorer by ramping up inflation. Inflation hurts everyone. If food, gas, housing and rent double while income stays the same everyone in actuality got a 50% pay cut.
With deflation, housing, gas and food dropping by say a quarter, as long as you maintain your current income you are actually getting a payraise of 50%. Now that is something we should all cheer.
As for those out of work, we shouldn't spend tax money on bailing out the rich, corrupt, billionaire banks, car companies, whose executives have been steeling billions, but rather give them $0 and put it all into a massive works program to employ the unemployed and underployed with a job paying at least $10/hour to all who want to work.

of 9:16AM December 19, 2008