Inflation makes debt worth less. Generally the working class buys homes and cars by borrowing money.
Of course banks will charge more interest to compensate for this so a high amount of inflation isn’t good. Deflation is bad because the banks are going to continue charging interest even while the value of the debt principle is increasing.
So ideally you want a small amount of inflation so there’s some wiggle room before dipping into deflation territory.
There’s too much inflation so central banks have to raise interest rates which makes people less likely to borrow money which shrinks the money supply. This is how inflation is controlled, but also not a good situation as it can lead to a recession. So it’s a delicate balancing act.
Economics is called the dismal science for a reason. Nothing is intrinsically “good” there’s a cost to everything. And no socialism isn’t some cheat code that allows people to escape the dismal realities of economics. Best you can ever do is balance things well enough that everyone can have a decent life.
Inflation makes debt worth less. Generally the working class buys homes and cars by borrowing money.
Of course banks will charge more interest to compensate for this so a high amount of inflation isn’t good. Deflation is bad because the banks are going to continue charging interest even while the value of the debt principle is increasing.
So ideally you want a small amount of inflation so there’s some wiggle room before dipping into deflation territory.
There’s too much inflation so central banks have to raise interest rates which makes people less likely to borrow money which shrinks the money supply. This is how inflation is controlled, but also not a good situation as it can lead to a recession. So it’s a delicate balancing act.
Economics is called the dismal science for a reason. Nothing is intrinsically “good” there’s a cost to everything. And no socialism isn’t some cheat code that allows people to escape the dismal realities of economics. Best you can ever do is balance things well enough that everyone can have a decent life.