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.
Think about your boss dropping your paycheck down to $200 a month (because money is so valuable now), but your rent is locked in at $1200 a month.
I already get a real pay cut every year and a real rent increase every year. When we’re below the annual pay cut, we just get fired.