>>8520
> I'm not too terribly enlightened in economics, only vaguely, why would deflation be a good thing? I thought it would discourage spending and encourage saving, which in turn would make businesses that don't deal in necessities make less profit, meaning that they'd need to fire employees and reduce costs to get sales.
I'm no expert either, and experts often disagree on this topic (even those of the same economic school), but here's a nuanced discussion of deflation from an Austrian perspective:
https://mises.org/library/anatomy-deflation
Notice that the author makes a clear distinction between monetary contraction and price deflation (which he calls "falling prices" to avoid confusion), which can be caused by increased productivity rather than by monetary contraction.
A few quotes from the article:
"What deserves special stress is the fact that even when falling prices are the result of monetary contraction, rather than increases in production and supply, and are accompanied by actual economic hardship rather than by general prosperity, their specific contribution to the situation is not only not that of cause, but of remedy. Falling prices in response to monetary contraction are precisely what enable a reduced quantity of money and volume of spending to buy as many goods and to employ as many workers as did the previously larger quantity of money and volume of spending. Preventing the fall in prices, including a fall in wage rates, serves only to prevent the restoration of production and employment."
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The case is different when the need for the fall in prices is caused by monetary contraction. In this case, the failure of prices to fall, in the face of the anticipation that they will fall, to the extent necessary to clear the market of unsold supplies of goods and labor, leads to a speculative postponement of purchases, which increases the pressure on prices to fall.2 Once prices do fall to the necessary extent, that is the end of the contraction. Indeed, given the existence of a speculative withholding of purchases in anticipation of prices and wages falling to some necessary level, once that level is achieved, the speculative withholding of purchases comes to an end and there is an increase in the volume of spending. In other words, the response to the necessary fall in prices and wages is economic recovery.
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Similarly, the best reason in favor of an actual decrease in the quantity of money is that suffering it may serve to avoid a greater, more severe decrease later on.
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Deflation, which, it cannot be repeated too often, means monetary contraction, not falling prices, is at best in the category of a pain to be endured only in order to avoid greater pain later on. It should never be, and virtually never is, regarded as any kind of positive in its own right. Indeed, opposition to credit expansion, and to the fractional-reserve banking system that makes credit expansion possible, rests for the most part precisely on the fact they are responsible for deflation, which would not exist in their absence.
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I recommend reading the whole article and, indeed, Reisman's book (long but amazing to read, discusses economic theory with historical sidenotes, and argues against communism, keynesianism and other anti-capitalist doctrines in great detail), freely available in pdf:
https://mises.org/library/capitalism-treatise-economics
Here's the author's Wikipedia entry:
https://en.wikipedia.org/wiki/George_Reisman