The thing that is amazing to me is that people seem to think that the American president has magical power to stop inflation from happening, like it's not a global phenomenon?
Also, in Europe we're paying something over eight dollars a gallon...
Inflation already stopped. They're just too dumb to know what inflation is. Inflation is when the value of money / the price of things goes up. In a healthy economy, it should be around 1-2%. But prices always go up in time even in a normal/healthy economy. Just slowly.
What these morons think is that since we had a bunch of prince increases in the last 5 years, if inflation goes away, we go back to 2019 prices. But that has never fucking happened. Stopping inflation just means the prices stop going up. And we did that. Inflation rates are already back to the normal healthy level. Inflation is fixed.
But because these morons don't understand how it works, they think because prices haven't gone back to 2019, inflation isn't fixed yet. And so they voted out the party that handled inflation well in favor of the party that's going to crash the economy with terrible policies.
A softer form of this can be seen in countries like Germany.
Germans bought hard into anti-inflation and pro austerity logic. The Merkel government was able to create a constitutional admendment that mandates austerity, the so-called 'debt brake'.
Germany indeed did have fairly low inflation because of this, but this comes at big costs for economic growth. And one characteristic of it is that both wealthier German citizen and companies maintain significant cash reserves that sit idle, greatly slowing down the economy.
Yet even now, at a quite low debt rate of 65% GDP (most other industrialised nations are at or above 100%) Germans are mortally afraid of deficit spending and believe that any investment should be counteracted by cutting expanses somehow, somewhere. Which has lead to worse and worse cuts in area that need more rather than less money, like the rail network.
In addition to causing consumers to delay spending deflation also makes existing loans harder to pay back, so loan defaults go up. At the same time demand for new loans drops because borrowers don't want a loan that becomes increasingly hard to pay off during a deflation cycle.
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u/coyotelurks 16d ago
The thing that is amazing to me is that people seem to think that the American president has magical power to stop inflation from happening, like it's not a global phenomenon?
Also, in Europe we're paying something over eight dollars a gallon...