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Culture War Roundup for the week of May 1, 2023

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Many people are riddled with debt because they absolutely need the latest Iphone or a shiny new car. Why would they consume less and hoard money if products were going to get slightly cheaper next year?

Not everyone behaves the same way, but even your average middle-class would-be homebuyer is probably capable of realizing what deflation means for their mortgage, to say nothing of the huge amounts of capital controlled by profit-maximizing institutions and their legions of finance professionals. The latter are certainly capable of doing basic arithmetic.

They just need to promise any level of profit. A profit in a deflating currency includes the profit plus the deflation.

The problem is it also includes the risk of failure and, most likely, the inability to redirect your investment. Sitting on cash during deflation is close to risk-free and is completely liquid.

It used to be that you didn't need to take on 30 or 40 year loans for the privilege of one day owning a house. It's good when products people need like energy, food and housing are cheap. Turning them into a debt-ridden investment product is harmful for most, beneficial to few.

I agree, but discouraging anyone from ever taking on debt using deflation isn't the way to solve this--improving housing supply is.

The bubble-bailout economy privatizes gains and socialize losses. And why should the government know what a good interest rate should be anyway? They routinely get it wrong, fuelling bubbles and then popping them.

This is a valid argument IMO, but it's an argument for not having government run the currency at all, not for deflation.

(effectively raising the price of houses still further by increasing repayments), reducing the value of houses (since we made them into investment products that are bought and sold with borrowed money), lowering demand and costing governments more in interest on the absurd amounts of money they've borrowed.

How can the price of houses go up while their value goes down? The housing and mortgage market is fairly broken, but as above this is a housing supply issue more than a monetary policy one. You mentioned above that things like food should be cheap--the same is true of housing, but we've been pretending it's an "investment" rather than a consumable good. No monetary policy will fix these issues.