• emergencyfood@sh.itjust.works
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    1 year ago

    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.

    • Neato@kbin.social
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      1 year ago

      Exactly. And deflation incentivizes hoarding money. Inflation is bad but deflation can be worse. If no one spends money because you’re literally making money by sitting in it the economy would crumble.

      In a bad case the government would have to slash interest rates, maybe even slightly negative.

    • intensely_human@lemm.ee
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      1 year ago

      Yeah it only works on the money. Holding income-generating assets isn’t affected because people can increase rents to maintain the same income stream.

      • ungoogleable@lemmy.ml
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        1 year ago

        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.

    • MrMonkey@lemm.ee
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      1 year ago

      Inflation is a tax on hoarding money.

      It’s a tax on my savings and my retirement. My savings lose 2% a year, on purpose. This means I have to play in the investment game to so much as break even. I’d rather not have to play the stock market game and just save my money for retirement without it losing value.

      • AFK BRB Chocolate@lemmy.world
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        1 year ago

        I’d rather not have to play the stock market game and just save my money for retirement without it losing value

        Which is exactly what they mean by hoarding money. Everyone would prefer that, and if everyone did, all that money would be taken out of the economy. Instead we’re all motivated to invest in things, which keeps the economy growing and healthier for all of us.

    • 🐱TheCat@sh.itjust.works
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      1 year ago

      all these takes kinda suck.

      The people most affected by inflation aren’t the rich at all. Theirs a whole generation inflated out of housing. Some might understand that as modern serfdom.