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Why is inflation desirable? (lemmy.world)
submitted 2 days ago by to c/asklemmy@lemmy.world
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I've been wondering this question for a while. Ignoring current events, why is a little bit of inflation desirable?

I do understand that it's done to "stimulate" the economy so people don't let their cash rot in a checking account, but isn't it a zero-sum game? Everybody says that money is not meant to stay where it is, rather, should flow through the economy. But if the economy always needs injections of liquidity because otherwise it fails, isn't the economy broken?

I feel like there's something I can't comprehend about that.

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[–] 3 points 14 hours ago

Less demand = people getting laid off because now there's not enough work -> increase in unemployed -> fewer people paying taxes and social security stuff -> government can spend less which often leads to cuts in social security programs -> people can spend even less -> demand for products and services drops even further -> more layoffs -> cycle repeats

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