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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: yard_man who wrote (13262)	11/10/2008 11:56:58 AM
From: JimisJim	Read Replies (1) \| Respond to of 50744

Deflation leads to horrendous unemployment as it squeezes corps' ability to make a profit -- the value of wages paid increases along with the value of cash in general... companies have to lower prices because people defer purchases as prices will be lower in the future... in the end, it leads to massive BKs and unemployment... the last time deflation hit the US, unemployment went over 25%... Now for the 75% who don't lose their jobs, OK, but even they get hurt because there are less people to pay taxes (of any sort, income or sales, or cap gains, etc.)... You do not want to see deflation take hold... it takes years and years to reverse and monetary policy is almost useless... Jim