|
Deflation is NOT good at all. Look at Japan to see what it does: people simply stop buying expensive consumer goods because they'll get cheaper anyway.
If the US were to suffer the same fate, a lot of people would stop buying computers, VCRs, TVs and such, simply because it'll become cheaper in a month's time, and the current model is still working.
This directly affects companies, with factory production dropping, and people being fired all over the place. This leads to less income for everyone, and even less incentive to buy consumer goods...
And as you can see in Japan, it takes forever to get out of that cycle...
|