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How come we experience so much more inflation than deflation? in other words, why does our buying power decrease far more often than it increases?
(lemmy.dbzer0.com)
this post was submitted on 22 Jul 2023
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Yes, and the people at the top do keep their money in circulation, and as a result their wealth stays constant across inflation while workers’ wages and savings go down.
I have no idea why you don’t see that as a transfer of wealth.
You say it incentivizes the rich to not hoard cash. Well, they don’t. In fact, it incentivizes everyone to not hoard cash, but the rich are the only ones with sufficient cash to trade that cash for income-generating assets.
It incentivizes everyone by punishing everyone for holding cash, but only the upper class is able to evade that punishment by converting their wealth. Poor people don’t have though cash to transform it into wealth. Their cash is only useful to them as cash.
This is why the poor are feeling the inflation the worst. People who own no stock are the ones hit hardest when the government printed a bunch of money and injected it into the stock market.
What you describe would be worse without inflation. The rich would still have most of the capital, but they also wouldn't bother investing it either, which at least recirculates the money and becomes income for others.