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How come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?
(lemmy.dbzer0.com)
this post was submitted on 22 Jul 2023
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Inflation is a tax on hoarding money. In an ideal world, it will push rich people and companies to reinvest their wealth in the economy, instead of hoarding it. Unfortunately, in the real world it doesn't work on the very rich, so it only affects the upper middle class and the moderately rich.
Yeah it only works on the money. Holding income-generating assets isnβt affected because people can increase rents to maintain the same income stream.
Income-generating assets are doing something to generate that income, which is presumed to have some beneficial effect on the economy more than cash sitting under your mattress does.