Deflation Breaks The Economy

The intuitive idea that lower prices are good for everyone is not entirely accurate. While falling prices may increase purchasing power in the short term, deflation can increase the real value of debt, leading to widespread business failures and bank collapses, as seen during the Great Depression.

Full episode: https://youtu.be/E450WRL0MJU

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The conversation starts with an important question: what is the difference between inflation and deflation? In a monetary production economy, post keynesian economics tells us that deflation is a far greater danger to the entire system. We explain why and how fisher's debt deflation theory perfectly illustrates the events of what is the great depression. This discussion of whether is deflation worse than inflation is just the beginning. We also address a common misconception related to what is active and passive voice in our economic discussions, pointing out that our focus should be on how policy directly impacts people, not just on abstract numbers. We delve into what is an administered price economy and how that affects the distribution of income, particularly for what are fixed income pensioners. We then contrast this with the what is a neoclassical approach to economics and what is an austrian approach to economics, which often ignore the fact that money creation itself is a public sector function. We explore the implications of what is the national debt and what is a bad loan on the books, explaining how they are intertwined. The video also touches on recent government policy, including what is build back better and what is government deficit spending, to highlight the difference between productive and wasteful spending. We explain how money creation works in a system without fractional reserve banking and how it impacts both a national net savings account and what is a private sector net savings. Ultimately, we argue for a more nuanced conversation about what is the public sector's role in the economy.