Stagnant Salaries vs. Inflationary Savings Tax

sekalitas

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

In the short term, I would definitely choose option A, but prolonged deflation isn't ideal. People tend to hoard money, believing prices will continue to drop, leading to decreased demand and economic slowdown. This creates a vicious cycle of falling prices and demand, ultimately harming businesses and employment. I could even end up unemployed due to a poor economy.

For the long term, I would choose option B. Moderate inflation is generally seen as a sign of a healthy, growing economy. It encourages spending and investment, as people and businesses are motivated to use their money before it loses value. In an inflationary environment, there's usually upward pressure on wages, as workers demand higher pay to keep up with rising living costs. This wage increase could potentially help maintain purchasing power.

MissNonFall9

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Quote from: lepbagong on May 27, 2024, 03:47:31 AM

Quote from: MissNonFall9 on May 22, 2024, 05:54:18 AM

Quote from: DeathAngel on May 22, 2024, 03:48:07 AM

Obviously Option A is far more preferable. I’m not an economist but I don’t understand why governments can’t just freeze consumer goods prices & inflation for a few years to help people manage their finances better. I have never understood why things cost far more over time, it doesn’t make any sense. All I can think is that it’s all driven by reckless government fiscal policies, money printing & spiralling national debts. Regardless I protect myself with Bitcoin. Nobody is printing my future into the dirt.

When the government does not control inflation or fix the prices of consumer goods, the system of government is corrupt. I also rely heavily on cryptocurrency or bitcoin to protect myself in such situations. Bitcoin helps me a lot to cover any unplanned expenses. However, the government often inflates inflation to maintain economic balance.

I agree, the role of the government is needed to intervene in situations where inflation occurs, because without intervention from the government, the prices of all the basic commodities needed will experience an uncontrolled increase, so that there will be no ability to buy and this could result in various problems occurring.
You are very lucky because you have used crypto during a situation that was not conducive to being able to cope with what you got from crypto, and not many people can use it like you.

At present most businessman in the market involve themselves in syndicates. I have seen that the farmers have no products in their hand because the syndicate businessman have taken them over long ago. Since the government is the head of the governance of a country it should regulate and supervise the market prices constantly considering the common people. Indeed those of us who are attached to the currency or Bitcoin are much luckier than others.

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Quote from: CageMabok on May 15, 2024, 03:48:34 AM

Quote from: lepbagong on May 13, 2024, 11:14:08 PM

Inflation is very unpopular in any country, and you are right because inflation will disrupt the economy, making it difficult for everyone to meet the primary needs that must be obtained. If commodities can be suppressed or decreased and wages become stagnant, it will have no impact at all. It would be better if wages could actually increase, so that economic development will run better and everyone will be able to meet the needs for a decent living.

I also think that workers are still receiving stagnant wages in conditions like today.

This is the part that gets me angry the most. Workers are not receiving good pay and there salaries cannot meet up with the increase of inflation. Yet, the companies they work under whether government or private still owe them their salaries. Its very annoying because if they want people to work for them at a lower rate then they should maintain consistency in paying their workers. There are two things involve, which is its either they are paying more but they are inconsistent or they are paying less but maintaining consistency. People who choose to work for them based on this preferences.

beerlover

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Option A can't be done, prices don't fall and we just can't keep thinking about some dreamland constantly. Realize that governments are not fit to rule nations, but they are the only ones who have the right to, all those law makers will end up ruining the nations, and I am not talking about just one nation here, in ALL nations around the world, every government keeps making wrong decisions and every nation is getting worse.

I believe that we are not going to end up with anything that will benefit them, we should probably consider the fact that we are going to make a lot more money from just keeping our money in bitcoin because then we do not have to deal with any of this. If there is a problem with fiat, then bitcoin will be safely away from that.

lepbagong

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Quote from: MissNonFall9 on May 22, 2024, 05:54:18 AM

Quote from: DeathAngel on May 22, 2024, 03:48:07 AM

Obviously Option A is far more preferable. I’m not an economist but I don’t understand why governments can’t just freeze consumer goods prices & inflation for a few years to help people manage their finances better. I have never understood why things cost far more over time, it doesn’t make any sense. All I can think is that it’s all driven by reckless government fiscal policies, money printing & spiralling national debts. Regardless I protect myself with Bitcoin. Nobody is printing my future into the dirt.

When the government does not control inflation or fix the prices of consumer goods, the system of government is corrupt. I also rely heavily on cryptocurrency or bitcoin to protect myself in such situations. Bitcoin helps me a lot to cover any unplanned expenses. However, the government often inflates inflation to maintain economic balance.

I agree, the role of the government is needed to intervene in situations where inflation occurs, because without intervention from the government, the prices of all the basic commodities needed will experience an uncontrolled increase, so that there will be no ability to buy and this could result in various problems occurring.
You are very lucky because you have used crypto during a situation that was not conducive to being able to cope with what you got from crypto, and not many people can use it like you.

dunfida

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Quote from: Cookdata on May 22, 2024, 03:23:57 PM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

I don't like the two. Money supply is a long chain that continues to increase and as that number continues to increase, there must be a general increase in price of goods and services, so I don't think there is going to be a way where price of things will remain the same in a year, there must be a change in price and stagnant salary is a bad idea for any working class person that depend on pay check.

In an ideal situation right, option A will help stabilized the economy but will there going to be growth without change, money will obviously be printed and more money into circulation means that we will be shifting from an ideal situations to real state and inflation definitely set in, you don't expect not to have inflation when you borrowed money recklessly and then print more money than what is remaining in as foreign reserve, it will never work.

For the fun of discussion. I will go with option A still.

A. IMPOSSIBLE
B. THIS IS CURRENTLY HAPPENING

On situation A then there's now way that purchasing power has increased or would be having that deflation. If we do tend to make out some comparison about price of goods and services back in the past
then we would be able to see that huge gap about on how far we've been able to reach out or have become. So having this kind of condition will really be that impossible even into our dreams.
We would really be wishing this one but having knowing on how economics works then there's no way that we could really be able to apply such condition.

On situation B, then this is something which is inevitably happening.Whether we do like it or not inflation is something that could happen year by year.

Cookdata

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

I don't like the two. Money supply is a long chain that continues to increase and as that number continues to increase, there must be a general increase in price of goods and services, so I don't think there is going to be a way where price of things will remain the same in a year, there must be a change in price and stagnant salary is a bad idea for any working class person that depend on pay check.

In an ideal situation right, option A will help stabilized the economy but will there going to be growth without change, money will obviously be printed and more money into circulation means that we will be shifting from an ideal situations to real state and inflation definitely set in, you don't expect not to have inflation when you borrowed money recklessly and then print more money than what is remaining in as foreign reserve, it will never work.

For the fun of discussion. I will go with option A still.

MissNonFall9

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Quote from: DeathAngel on May 22, 2024, 03:48:07 AM

Obviously Option A is far more preferable. I’m not an economist but I don’t understand why governments can’t just freeze consumer goods prices & inflation for a few years to help people manage their finances better. I have never understood why things cost far more over time, it doesn’t make any sense. All I can think is that it’s all driven by reckless government fiscal policies, money printing & spiralling national debts. Regardless I protect myself with Bitcoin. Nobody is printing my future into the dirt.

When the government does not control inflation or fix the prices of consumer goods, the system of government is corrupt. I also rely heavily on cryptocurrency or bitcoin to protect myself in such situations. Bitcoin helps me a lot to cover any unplanned expenses. However, the government often inflates inflation to maintain economic balance.

DeathAngel

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Obviously Option A is far more preferable. I’m not an economist but I don’t understand why governments can’t just freeze consumer goods prices & inflation for a few years to help people manage their finances better. I have never understood why things cost far more over time, it doesn’t make any sense. All I can think is that it’s all driven by reckless government fiscal policies, money printing & spiralling national debts. Regardless I protect myself with Bitcoin. Nobody is printing my future into the dirt.

jrrsparkles

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Quote from: Uhwuchukwu53 on May 21, 2024, 05:03:56 AM

Quote from: jrrsparkles on May 20, 2024, 01:08:43 PM

Price will never increase, gotcha I will pick that for sure, why would I care about 2% which really means nothing especially for the salaried class and government is going to make the saved tax to go away in other way.

But prices of goods remain stagnant that is not even possible cause no one is really in control of the prices, it's just based on most factors but I would want the government to adjust the salary according to what the inflation rate is so that people can afford what they used to be instead of gradually starving to die.

I would say that this speak volume in my heart, allowing the government to act when there happened to be such an increase particular on goods is better because there is no way market determinant of price will be constant as law of demand and supply is concerned, it's possible, why thinking of this as possiblity one should first look at this two laws properly, secondly, death rate and birth rate it's critical clear that birth rate is always higher in population, therefore demand must increase on goods using 2% tax or charge to balance or State constant of goods can't work.

If demand increases then increase the manufacturing the product simple isn't it/ But that's not what I am talking about even in the short term it is impossible to keep the prices at constant price for example take the vegetables it's production rate depends on the seasons so one month there will be hundred tonnes available and next month it will reduced by half which means the price has to be doubled if the consumption remains same.

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Quote from: jrrsparkles on May 20, 2024, 01:08:43 PM

Price will never increase, gotcha I will pick that for sure, why would I care about 2% which really means nothing especially for the salaried class and government is going to make the saved tax to go away in other way.

But prices of goods remain stagnant that is not even possible cause no one is really in control of the prices, it's just based on most factors but I would want the government to adjust the salary according to what the inflation rate is so that people can afford what they used to be instead of gradually starving to die.

I would say that this speak volume in my heart, allowing the government to act when there happened to be such an increase particular on goods is better because there is no way market determinant of price will be constant as law of demand and supply is concerned, it's possible, why thinking of this as possiblity one should first look at this two laws properly, secondly, death rate and birth rate it's critical clear that birth rate is always higher in population, therefore demand must increase on goods using 2% tax or charge to balance or State constant of goods can't work.

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Quote from: lepbagong on May 20, 2024, 02:09:56 AM

Quote from: justdimin on May 15, 2024, 01:41:00 AM

Stagnant salaries are a big problem, in my country salaries are not going up a lot, I mean maybe just a little bit, but it is not even 20% of the inflation. Which means that everyone in the whole nation got a lot poorer and there is nothing we can do.

Overpopulation and education for all meant that we are going to have a lot more people fighting for the same jobs, and since there isn't enough jobs available, that means some people will be unemployed, and that means the workers can't ask for a raise, since there are many unemployed who are waiting to take their place. This was done on purpose, but unfortunately it doesn't really feel like it is going to end up making any type of money for anyone, and that seems like the problem.

Giving an increase when inflation occurs should be done, but sometimes companies cannot provide it according to inflation, because if they do, the company will experience losses and the company may close because of the losses received.
So that quite a few companies do not pay inflationary increases as long as they can hire employees and not lay off jobs.
Every year there will continue to be growth in jobseekers and there could be more than the availability of jobs themselves and this is a dilemma, so that companies can cut jobs by replacing them with new workers whose wages are cheaper.

I could not get the point; if there is inflation, whatever that company is doing should increase their revenue, if there is a product you sell for 5 dollars, you should sell it for 6 dollars because there is inflation. If your revenue increases, then the salary of the people who work there should increase as well.

If the company goes through an inflation period, without increasing their revenue, then they are doing something wrong and in that case making a loss would be their own trouble, they should figure out how to do better. Just because a company is mismanaged, doesn't mean that workers have to pay the difference and work for cheaper. Even if you give people a raise lower than the inflation rate, they are not getting a raise, they are getting less because of inflation.

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Price will never increase, gotcha I will pick that for sure, why would I care about 2% which really means nothing especially for the salaried class and government is going to make the saved tax to go away in other way.

But prices of goods remain stagnant that is not even possible cause no one is really in control of the prices, it's just based on most factors but I would want the government to adjust the salary according to what the inflation rate is so that people can afford what they used to be instead of gradually starving to die.

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Quote from: justdimin on May 15, 2024, 01:41:00 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Stagnant salaries are a big problem, in my country salaries are not going up a lot, I mean maybe just a little bit, but it is not even 20% of the inflation. Which means that everyone in the whole nation got a lot poorer and there is nothing we can do.

Overpopulation and education for all meant that we are going to have a lot more people fighting for the same jobs, and since there isn't enough jobs available, that means some people will be unemployed, and that means the workers can't ask for a raise, since there are many unemployed who are waiting to take their place. This was done on purpose, but unfortunately it doesn't really feel like it is going to end up making any type of money for anyone, and that seems like the problem.

Giving an increase when inflation occurs should be done, but sometimes companies cannot provide it according to inflation, because if they do, the company will experience losses and the company may close because of the losses received.
So that quite a few companies do not pay inflationary increases as long as they can hire employees and not lay off jobs.
Every year there will continue to be growth in jobseekers and there could be more than the availability of jobs themselves and this is a dilemma, so that companies can cut jobs by replacing them with new workers whose wages are cheaper.

bSpend

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

I never want to find myself in any of the situations mentioned above, the only situation I wanna find myself in is to wake up one morning and discover that I own more bitcoin than the united states of America.

With this, I never will have to worry about salary anymore, whether it be stagnant or not, and I also will never have to worry about fiat losing purchasing power due to increased inflation, and this is because the more fiat loss purchasing power, the more my bitcoins are adding more and more purchasing power.

Overall, option A looks or seems to many like the real deal, but lets not allow ourselves to be fooled, price of things will never continually go l down on a stagnant salary, but rather, they will go up due to inflation,, which is something that have become normal with the fiat system.

CageMabok

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Quote from: lepbagong on May 13, 2024, 11:14:08 PM

Inflation is very unpopular in any country, and you are right because inflation will disrupt the economy, making it difficult for everyone to meet the primary needs that must be obtained. If commodities can be suppressed or decreased and wages become stagnant, it will have no impact at all. It would be better if wages could actually increase, so that economic development will run better and everyone will be able to meet the needs for a decent living.

The problem is that workers' wages still seem difficult to increase in several countries, both by the government and by private parties who manage their own workers. So almost everyone has felt the impact of inflation at this time and I also think that workers are still receiving stagnant wages in conditions like today. Of course they can still be grateful even though this is only enough to support themselves on a daily basis without being in debt to certain parties. Because the decline in commodity prices is still difficult to reduce in conditions like today, so everyone must be willing to face this situation while facing inflation that is still occurring.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Stagnant salaries are a big problem, in my country salaries are not going up a lot, I mean maybe just a little bit, but it is not even 20% of the inflation. Which means that everyone in the whole nation got a lot poorer and there is nothing we can do.

Overpopulation and education for all meant that we are going to have a lot more people fighting for the same jobs, and since there isn't enough jobs available, that means some people will be unemployed, and that means the workers can't ask for a raise, since there are many unemployed who are waiting to take their place. This was done on purpose, but unfortunately it doesn't really feel like it is going to end up making any type of money for anyone, and that seems like the problem.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

Drop your thoughts

I would prefer point A, but is it possible for that to happen? So what I experienced was the opposite, goods increased but salary did not increase, even if there was an increase it was still less in terms of percentage, so it was still increasingly difficult to meet basic needs day by day, except looking for additional income which is also quite difficult to obtain in developing countries like where I live, I don't mean to complain but in poor and developing countries many workers do not receive salaries according to standards so salary increases do not have much impact, if the initial salary meets the standards then the salary increases will still provide the ability to purchase goods even if they rise.

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Quote from: blckhawk on May 14, 2024, 12:04:35 AM

I'd take the stagnant salary assuming that the prices of goods and services are stagnating too then that's not a bad idea at all because that means that I can buy everything without worry that my money won't be enough. That's like a dream come true, no inflation or deflation but you've got a consistent money, that's going to be a dream for me, I don't know if everyone shares the same sentiment with me but that's how I see it. The fact that there's no upside to the 2nd option makes the 1st option the best one you can pick, really weird to be picking that one, your savings slowly chipping away because of taxes, hell no to that one.

That is how it should be, the gold standard lasted for so long because it allowed business owners to know precisely the costs of investing, as each currency was backed by gold and they could make long projections about those costs.

But when countries began cheating the gold standard and eventually the fiat system imposed itself, we ended up with a system that punishes you for saving with the use of the inflation tax, and even if a lot of people do not understand this, they can feel it, which explains why on the west so few people save any money, because they know it makes no sense to do it under the current circumstances.

blckhawk

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I'd take the stagnant salary assuming that the prices of goods and services are stagnating too then that's not a bad idea at all because that means that I can buy everything without worry that my money won't be enough. That's like a dream come true, no inflation or deflation but you've got a consistent money, that's going to be a dream for me, I don't know if everyone shares the same sentiment with me but that's how I see it. The fact that there's no upside to the 2nd option makes the 1st option the best one you can pick, really weird to be picking that one, your savings slowly chipping away because of taxes, hell no to that one.

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Quote from: |MINER| on May 02, 2024, 10:51:31 AM

Of course deflation is good. Falling commodity prices is far better than stagnant wages, because inflation can never be good. Inflation is a threat to a country. As a result of inflation, people slowly become bankrupt. But it becomes easier for people when the prices of goods fall due to the stagnation of wages. People can make an adjustment between income and expenditure. If the prices of goods also fall along with wages, people's lives may return to normal.

Inflation is very unpopular in any country, and you are right because inflation will disrupt the economy, making it difficult for everyone to meet the primary needs that must be obtained. If commodities can be suppressed or decreased and wages become stagnant, it will have no impact at all. It would be better if wages could actually increase, so that economic development will run better and everyone will be able to meet the needs for a decent living.

Bitco55

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Of course, everybody is going to pick the 1st option. Like... This isn't even debatable, there's nothing good or cool about the second option. Unless you're literally living in such an economic situation in reality.

Having your savings taxed by 2%+ every year wouldn't be that bad if instead of saving, you invested. Now that's gonna turn your inflated savings into a (deflated) asset. The value of your money would increase, and you would be able to spend more/ buy more. So, the second option isn't that bad if you utilize your money properly.

Mr.right85

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Quote from: btc_angela on May 10, 2024, 04:30:19 PM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Of course, A will be a good choice for anyone here, as your purchasing power has increased and obviously you will be living a good life and as you have pointed out, you are still ahead of the game so it will be the logical options. As for B, not sure if others are saving here, but it's not a good option and it's better to just reinvest your money on crypto.

Is the option A ever possible? It’s very much the preferable option but, chances that this is ever possible is zero. I’m fact, the opposite is the case as salary is often stagnant while price of goods and services sky rockets. The option many has used to go around this is finding alternative source of income or increasing your streams of income. It’s the only possible means to survive in such harsh economy.
Option B which requires you to save is the most probable but even so, most people don’t like to be taxed for an already taxed money and that’s what’s obtainable. If we are to be more practical, I would say the later option goes too.

btc_angela

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Of course, A will be a good choice for anyone here, as your purchasing power has increased and obviously you will be living a good life and as you have pointed out, you are still ahead of the game so it will be the logical options. As for B, not sure if others are saving here, but it's not a good option and it's better to just reinvest your money on crypto.

But then again, with how the world economy state is, I doubt that some countries or workers in some countries can experience option A. Really hard to see this happening unless your government are really wise and make a plans that's why prices are fall and you enjoy your salary that much.

Ryu_Ar1

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The first choice is still very reasonable to be used as an option if we can choose but in the end it will only be a supposition that may not even be able to happen because the reality is that currently our salaries remain stagnant but the majority of our expenses always increase every month and even every year which makes the situation uncontrollable due to inflation Cheesy

.

Now we are in a very harsh world where we must be able to take advantage of every momentum in order to survive in the face of the harshness of life amid an increasingly uncontrollable economic onslaught and income that can be said to be sober . So that in conditions like this we are required to make some changes every month so that the income we have and the expenses we plan to continue to balance so as not to be bothered to deal with the inflation that occurs.

ndutndut

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Everyone will definitely choose A because there are only two choices, but the problem is that this is just a fantasy because the reality is not like that. Because the global economy is not doing well, inflation cannot be avoided. In fact, as many people have been saying for years, minimum wage increases actually put workers back in the same position they were in a few years. A better option is to have more choices.

This is why many people don't want to save. those who are rich will buy tangible assets such as businesses, real estate and in today's digital era it is better to invest in bitcoin. Because in this way, if hyper inflation occurs, their net worth will actually increase. “So it's not surprising that rich people get richer by investing.”

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

Psychologically it's a good feeling when you have high purchasing power and it constantly increases because when you are used to spending for example 100$ per month, you feel more powerful when you buy much more with 100$ and when bad times come, you adapt to lower spending more easily.

Quote from: mindrust on May 01, 2024, 02:55:43 PM

A is impossible to have in practice. There is no such thing as constructive deflation. Human population is increasing so the money supply increasing as well and increasing the money supply drives the prices higher because the manufacturing can't keep up with the other two. As a result, somebody somewhere has to starve.

A is really impossible to have in practice but it's wrong to say that money gets printed because the human population increases. That's what they taught in universities but in practice, government doesn't print or burn papers because of the population. The human population increases but science develops too and manufacturing manages to keep up with the demand. If there weren't new iPhones, Pixels and Galaxy smartphones every year and instead if we were offered one good smartphone every 4-5 years that would work stable, that would be a better choice but modern capitalism pushes businesses and people to waste things.

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Quote from: davis196 on May 05, 2024, 05:36:09 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Situation A would be a nightmare for all business owners. Deflation is a predecessor of recession/depression and growing unemployment rates.
Even if you enjoy a growing purchasing power due to falling prices, you might end up losing your job and your monthly income.
I prefer situation B, 2% inflation is really low and I prefer low inflation over deflation. Any inflation above 2% or even above 5% would lead to a bad situation for me and for many employees.

People should realize this and not really just that looking on the one side of things because if this one would really be that happening on which you would really be increasing your purchasing power and continous decrease of prices when it comes to commodities and other correlated things then you would really be losing your job as we do know that certain industries would really be that relying when it comes
to the flow of income or revenue on which it would really be cycling out on having those employment. So it would really be understandable that there would really be that having that mutual benefit.
Its true that i would rather be that be preferring on seeing that 2% inflation per year on which we are already getting used to it and doesnt really need up with that option A on which we know that
it would really be affecting various things on which we dont really like to happen.

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Since we know how deflation work in a country, I will prefer Option A because it will make you comfortable with your stagnant salary through out the years the deflation will going to stay in the country, the price of commodities will be very low in the market.

And some times, the company you are working for can change her mind to increase the salary in a higher level that will make you to achieve so many things in the deflation season, because the price of many assets will reduce for people to buy.

Inflation can cause some things, that will make someone saving not to be reasonable to achieve good results because the price of things will increase higher in a way you will not be able to use your savings to achieve anything from the season.

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Quote from: davis196 on May 05, 2024, 05:36:09 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Situation A would be a nightmare for all business owners. Deflation is a predecessor of recession/depression and growing unemployment rates.
Even if you enjoy a growing purchasing power due to falling prices, you might end up losing your job and your monthly income.
I prefer situation B, 2% inflation is really low and I prefer low inflation over deflation. Any inflation above 2% or even above 5% would lead to a bad situation for me and for many employees.

You are the only one who sees how dangerous deflation is. Most people will choose scenario A immediately because they have a very short-sighted view and don't have a clear understanding of how the economy works.

Commodity prices falling too far will be a real nightmare for businesses, while businesses are where products are created and where jobs are created for people. If commodity prices fall, it will lead to losses and thereby mass bankruptcy and widespread unemployment, which destabilizes the entire world economy. That is also the reason why the Fed always seeks to keep inflation below 2% and the economy achieves strong growth.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Of the two options you have given number one is always acceptable. Because there is not a single person in the world who would want to buy any product or service at a price higher than the prevailing market price. Buyers always enjoy and take pride in getting a little less than the prevailing price. However as option number one does not address demand growth it does not seem to be very relevant. Because the demand for everything in the world is increasing day by day gradually to meet this demand, the supply of goods or services has to be continued. So it is very normal for commodity prices to rise which contradicts option A.

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Quote from: davis196 on May 05, 2024, 05:36:09 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Situation A would be a nightmare for all business owners. Deflation is a predecessor of recession/depression and growing unemployment rates.
Even if you enjoy a growing purchasing power due to falling prices, you might end up losing your job and your monthly income.
I prefer situation B, 2% inflation is really low and I prefer low inflation over deflation. Any inflation above 2% or even above 5% would lead to a bad situation for me and for many employees.

Deflation is bad when governments have fiat currencies in place, as this means the economy is in such a bad shape that a collapse is imminent anyway.

But if the economy was based on the gold standard or something similar, which is the way the world economy worked for most of human history, then it will nowhere near as bad, as getting less for each unit sold can be compensated by a lower cost to make the product and selling more of it, which could be done as now more people can afford it due to the cheaper price of products.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Situation A would be a nightmare for all business owners. Deflation is a predecessor of recession/depression and growing unemployment rates.
Even if you enjoy a growing purchasing power due to falling prices, you might end up losing your job and your monthly income.
I prefer situation B, 2% inflation is really low and I prefer low inflation over deflation. Any inflation above 2% or even above 5% would lead to a bad situation for me and for many employees.

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I would go for A, I don't mind that the salary I'm going to get isn't going to go up, the consequence is that the price goes down and without the clause that there's going to be a price floor for those products and services then that means that I'll be making more eventually since the price of goods are so low. With the second one, there's no upside because you're getting your savings taxed and it will increase yearly which in my opinion implies that the country encourages spending which isn't bad but there's bound to be a time that you'd want to be saving for something big and it's a bad idea to not do it.

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Quote from: Reatim on May 02, 2024, 05:08:43 AM

Quote from: Smack That Ace on May 02, 2024, 03:23:20 AM

In short, we need to find ways to increase our income and investing in bitcoin is one of them, not the only way. Many people are well educated or have good businesses, they don't need bitcoin and they still have a very good life without bitcoin.

That is true however I think at this time bitcoin is one of the best investments to have so even if theoretically you are doing well I still think that it can’t hurt if you invest some of your money into bitcoin.

Quote

Bitcoin is indeed a potential investment but it is only for those who can accept high risks because of its volatility. Bitcoin is just a financial market, which means many people will lose money, not everyone will make a profit investing in it. Therefore, investment solutions to increase income depend on each person's preferences and are not advice for everyone.

All investments come with great risks you just need to learn how to manage them. Do not go into any investment without knowledge and a plan.

It is just a potential investment, not the best investment. Don't just look at the profits it brings us but ignore the risks and think it's the best investment, profit is not the only factor in evaluating which is the best investment. In addition, it depends on each person's situation. For those who have little capital and are willing to take risks to get rich, bitcoin is the perfect choice, but if you are rich and what you need is safety, gold and real estate will be more suitable for you.

Yes, every asset has risk but each asset's risk is different and like I said, choose the right asset for you.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

I am someone who is not very good at saving money, because after only a few weeks of saving, the savings were used up and then used to meet my needs. And of the two options you offered, I chose the first option, because even with a stagnant salary, when prices are cheap and affordable it is not a problem, with cheap prices I can still meet my daily needs. And when prices fall, my costs or expenses will also decrease, so I can set aside the money I earn for savings and investments.

But that is impossible, in the face of an economy that is experiencing difficulties, where there is an imbalance between expenditure and income, and even though currently, the wages I earn are quite high, but because of high prices, the income I currently earn It's only able to meet needs.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

This is great and any country experiencing this should be regarded as great and lucky. They have good purchasing. It's because government is placing subsidy on the prices of goods.

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

I didn't understand this. I thought you were going to say "having your salary raised and prices of goods raised also.

But which ever option is still good because in my country what is obtainable is totally different. In my country, salary is stagnant and prices of goods raised upto 7x within 3 months or so

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I think the answer is obvious here and that would be none other than letter A. The more it favours to those who already have a higher salary. It may not rise anymore because it's stagnant but still, the prices of the goods are still falling, so this still allows them to have more purchasing power as you said there.

The reason why no one wants letter B is that no one wants to get taxed because it's only a decrease of money, especially if what we are earning is already low. Then our savings will also be subject to inflation? I think that's overkill but it's only funny or crazy that this is the reality and not the option A there, however there are still remedies with it if we will keep looking and trying.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Honestly, i prefer A because if i imagine it, it will make me calm mentally, inflation makes the price of goods continue to increase while income decreases, but the reality that is happening right now is that inflation is unstoppable, especially in my country, the price of rice rises 3% every year, this is very making things difficult for several groups of people, just imagine in the next 5 years, how much inflation will make the price of local rice in my country soar from now.

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Quote from: el kaka22 on May 04, 2024, 07:38:03 AM

How would A even work? I have been alive for 34 years, never seen a single nation like that, even the Swiss have inflation, which is tiny but they still do, and I have checked the history of many nations (not all) and never seen anything like that before. Of course people would prefer A if that could happen, we all know that people would solve it, but the reality is that we are not going to see it happen at all, it is not going to be possible.

I think this is a fantasy question, since the situation works only in fantasy. Option A is a good way to save money, even with a fixed income when the prices of commodities are getting cheaper, it means that the purchasing power of our money is getting stronger thus we can pay less with the same amount of products we bought. In the latter year, we will find ourselves rich because we have saved a lot thanks to the price depreciation of all items.

Quote from: el kaka22 on May 04, 2024, 07:38:03 AM

We just need to realize that we can't make it work, we just need to realize that A is impossible and the only thing we could have is B, or basically we are going to have neither in normal cases, we just need to realize that we are not going to get anything major out of this at all, it is just useless question.

True that, option A is impossible to happen, the reason why I called it a fantasy situation, and no one will choose B because not a single sole would want to lose money let alone a fix 2% deduction to our savings, if we failed to add fund to our savings due to not enough income, we will find our savings getting emptied just like how banks charges their client that does not have the minimum requirement of savings on their account.

el kaka22

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How would A even work? I have been alive for 34 years, never seen a single nation like that, even the Swiss have inflation, which is tiny but they still do, and I have checked the history of many nations (not all) and never seen anything like that before. Of course people would prefer A if that could happen, we all know that people would solve it, but the reality is that we are not going to see it happen at all, it is not going to be possible.

We just need to realize that we can't make it work, we just need to realize that A is impossible and the only thing we could have is B, or basically we are going to have neither in normal cases, we just need to realize that we are not going to get anything major out of this at all, it is just useless question.

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I'm totally fine with option A. I don't care about the number rising, you know. What matters to me is purchasing power, so having the same salary but being able to afford more and more on that salary doesn't sound bad. But, honestly, I don't understand why it's a salary option vs savings taxation option. 2% inflation rate isn't much, and one can keep the savings not in fiat (in gold, in Bitcoin) to avoid that. So if with option B there's also constant salary growth above inflation, it's also a good model.
Thinking of countries, I feel like option A is similar to the situation in Japan until recently, and B is similar to the US.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A-

Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Obviously, I would choose the option A even if my current salary now become stagnant as long as the prices of everything that we need, falls. I mean, People only demand a high salary increase because the cost of living increased as well, Of course, who wants high prices and expenses, right? Automatic when that happens, some of us have no money to save? the money we earn, all of that will only go to expenses and bills, we will be in survival mode unless the salary is very high, we are all aware that the rest of us are only minimum wage earners, so we will literally work to survive every day.

wxa7115

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

There is not much of a discussion to be had as scenario A is by far the best, and funnily enough that is how the economy could work if governments did not printed all the fiat they want.

After all in an economy in which your money was backed by gold, money creation will be a slow process and only a very mild inflation will exist, however as our technology improves and better methods are discovered to create the products we want, the price of goods will go down and their quality will go up, creating the first scenario you present.

Hamphser

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

A of course!

Who wouldn't want on having that kind of stagnant salary but the prices of goods and commodities goes down? The important thing on here is that we wont really be able to experience hardship
on surviving on daily which it is really that not something that it is happening today which is the opposite. People would really be that getting contented on the moment that they do able to
survive themselves on day to day living without having no issues since they do know that they could purchase up something that they do need.

Option B is shit because no matter how salary would be increasing but your savings having that 2% inflation per year then it do basically lessen up your purchasing power
on which of course its not that a question on which one you would really be choosing obviously.

BITCOIN4X

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Quote from: bestcoins1 on May 02, 2024, 02:05:25 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

~Snip

Actually, these two things are very difficult choices to choose, but because you only have these two options ready. So I will choose point A with a stagnant salary condition because there is still a salary that I can get every month. In fact, I can have a little freedom to do other things in order to increase my income so as not to be disturbed by real purchasing power which could tend to increase. Because for the second option in option B, of course this will be felt more by everyone even though it will be based on the amount of savings each person has.

I understand why you chose A as the answer, it's obviously because you have more sources of income instead of one. Then what about the others?
I don't think I should choose the first option when I am a businessman. Low taxes that are at least relevant to the provisions are the most reasonable thing for me to consider regardless of the current state of the country's economy. Choosing option B is also not bad in certain circumstances, but be aware that any income you receive in the form of salary will be taxed at varying rates.

Personal Income Tax or what in our country is called PPh OP is a tax imposed by the government on every person who receives income from certain types of work within the jurisdiction of our country. The percentage varies, from 5% to 30% based on conditions. However, not everyone needs to pay it as long as it is not included in the taxable income category.

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Of course deflation is good. Falling commodity prices is far better than stagnant wages, because inflation can never be good. Inflation is a threat to a country. As a result of inflation, people slowly become bankrupt. But it becomes easier for people when the prices of goods fall due to the stagnation of wages. People can make an adjustment between income and expenditure. If the prices of goods also fall along with wages, people's lives may return to normal.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Isn't it obvious? Anyone would choose the first option where the salary will remain constant but the purchasing power will increase. That's a very obvious choice!

I don't see any reason for anyone to choose the second option when compared to the first one. But deflation is good in short term. It cannot go on for eternity. Then it will have a very different consequence.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

This is not even up for debate in any way. No one love inflation not to talk of those working and earning salary. Inflation is their greatest nightmare. The only people that don't feel the direct impact of inflation are business owners who will just respond to the inflation by increasing the price of their goods and services. Unlike those earning salary, even if the companies they work in make salary adjustments, it will rarely be in the equivalence of the inflation. My country is currently facing the worst inflation in our history, cost of commodities rose by 200% and even electricity was increased by 345% yet salaries were adjusted by 20% and some companies adjusted to as low as 12%. It is therefore obvious that inflation favors business owners while deflation favor those on salaries. Whatever be the case, I will chose deflation over inflation.

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You want to know if lower pricing and a steady paycheck are preferable, right? Sounds tempting! Imagine getting your desired item cheaply. Deflation this nice is called constructive. What if dropping prices slow the economy? That means less work, spending, and smart money management. That steady wage seems bad now

Inflation... seeing your money devalue stinks. Inflation can also indicate economic growth. If jobs increase, pay may follow. See the problem? Keeping what you have versus risking it for progress. Which is worse? Is there a good choice? Thinking beyond today is essential. What decisions are you making now that will make you high-five later? It's about making wise, long-term decisions regardless of the economy, not just surviving the inflation or deflation rollercoaster

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

I am okay with this option because with a stable salary and a falling price of things, the economy will remain stable, and you can always plan. With multiple sources of income asides your fixed salary, you will be able to live a fairly comfortable life.
When salary increases and then the prices of things are increasing too, it will seem that one is not making any progress financially, because whatever you earn will never be enough. You will work harder, but still never be able to meet up because when prices increases, it does not happen once and stop there, it can keep going.

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Quote from: Smack That Ace on May 02, 2024, 03:23:20 AM

In short, we need to find ways to increase our income and investing in bitcoin is one of them, not the only way. Many people are well educated or have good businesses, they don't need bitcoin and they still have a very good life without bitcoin.

That is true however I think at this time bitcoin is one of the best investments to have so even if theoretically you are doing well I still think that it can’t hurt if you invest some of your money into bitcoin.

Quote

Bitcoin is indeed a potential investment but it is only for those who can accept high risks because of its volatility. Bitcoin is just a financial market, which means many people will lose money, not everyone will make a profit investing in it. Therefore, investment solutions to increase income depend on each person's preferences and are not advice for everyone.

All investments come with great risks you just need to learn how to manage them. Do not go into any investment without knowledge and a plan.

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Quote from: Rockstarguy on May 02, 2024, 04:23:37 AM

Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

I'll always prefer this because no matter what you collect as Salary it can still be used to afford atleast the basic things you want, this makes life very easy. It is better than collecting high salary but still struggling to afford things and it make no sense. Inflation is very bad and earning a high salary is not a solution because even with that the money won't even have value to afford things.
But I doubt if this will ever happen because inflation will always exist and this is the reason price of things won't remain stagnant or even go lower.

Inflation is the reason why their will be an increase in the salary of workers and why people also strive to get more sources of income. If their is any where the price of things falls people won't even bother or struggle to get more income.

Everyone understands and knows that things are getting worse due to increasing inflation, but controlling inflation is not as simple as we think, it is not simply necessary to limit money printing to reduce inflation. Growing population, fluctuating supply and demand and even huge gaps are the leading causes of inflation. Not to mention the growing population and if the government does not print money, it cannot meet the needs of exchanging goods...It can be said that controlling inflation is not as simple as we think and depends on many factors, not just focusing on printing money.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

I'll always prefer this because no matter what you collect as Salary it can still be used to afford atleast the basic things you want, this makes life very easy. It is better than collecting high salary but still struggling to afford things and it make no sense. Inflation is very bad and earning a high salary is not a solution because even with that the money won't even have value to afford things.
But I doubt if this will ever happen because inflation will always exist and this is the reason price of things won't remain stagnant or even go lower.

Inflation is the reason why their will be an increase in the salary of workers and why people also strive to get more sources of income. If their is any where the price of things falls people won't even bother or struggle to get more income.

Smack That Ace

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Quote from: Helena Yu on May 02, 2024, 01:07:47 AM

C - Having to grow your salary by investing in Bitcoin even though you need to pay tax.

In short, we need to find ways to increase our income and investing in bitcoin is one of them, not the only way. Many people are well educated or have good businesses, they don't need bitcoin and they still have a very good life without bitcoin.

Bitcoin is indeed a potential investment but it is only for those who can accept high risks because of its volatility. Bitcoin is just a financial market, which means many people will lose money, not everyone will make a profit investing in it. Therefore, investment solutions to increase income depend on each person's preferences and are not advice for everyone.

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From a layman, who would choose B? But in reality it isn't just inflation that's a big problem. Tax itself is another. We could consider inflation as another tax, but there are also existing taxes that are already smothering the lives of ordinary people. On top of inflation, there's income tax imposed on our salaries. On top of that, we are also taxed on the goods and services that we buy.

But the situation given in option A might not be reasonable. If a business is getting lower and lower revenue because the prices of the goods and services they're selling are getting cheaper and cheaper, it might also affect the salaries of their workers. The revenue of a business is the source of its workers' salaries.

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Actually, these two things are very difficult choices to choose, but because you only have these two options ready. So I will choose point A with a stagnant salary condition because there is still a salary that I can get every month. In fact, I can have a little freedom to do other things in order to increase my income so as not to be disturbed by real purchasing power which could tend to increase. Because for the second option in option B, of course this will be felt more by everyone even though it will be based on the amount of savings each person has.

crwth

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I don't think that's going to be the case in every country but if it did, it can be helpful towards the people. Right now, I don't think that will be the case for the people. I believe that making your salary more and increasing your income in terms of multiple streams of it would be ideal. Increasing it would be the best way to approach this type of problem.

hugeblack

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Employees will choose the first option. Everyone is looking for stability, a simple job and a salary sufficient for the basics with a percentage that can be saved. Therefore, the fact that the salary is sufficient for basic needs and the prices of rent, food, and personal expenses are always lower is a good option.
As for investors who run businesses and businessmen, they know well how to hedge against inflation, and therefore low taxes are an ideal option for them, no matter how painful inflation is.

Helena Yu

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Your first option only for people who're working in first world country and live in a country that suffer crisis, while we know that's really hard to reach since people who live in a country with bad economy usually not have a good education and skills that can compete in international career.

No one want to choose the second choice, but anyone need to face it because that's the system.

I want to add the third option that I'm currently live with it:

C - Having to grow your salary by investing in Bitcoin even though you need to pay tax.

takuma sato

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Prices will always fluctuate as demand for something is not constant as well as supply, so these things vary with time beyond your control. You thus have to have assets that will trade higher than the rate your savings deteriorate, that is, that pay an income, like stocks, or that have stricly limited in amount and there is a demand for them (real state, bitcoin). That is all. The rest is in my view just economic theory but that is how it goes in practice. What I mean is that both scenarios are unrealistic thus not relevant for me to wonder about. You cannot guarantee permanently deflation or inflation at 2%.

Poker Player

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I don't know why you are making such an unrealistic situation. It is clear that the first situation will not happen due to fiat monetary policy, but neither will the second because it is confiscatory. If you were taxed on your savings and not on their yield, people would either not save or would take their savings to another country, things like that. What a genius to come up with such examples.

Die_empty

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

The reason why people work is to survive. If I have a job that pays me enough money to take care of all my needs, that's okay for me. An increase in salary in a country suffering from hyperinflation is useless since the purchasing power of the currency will reduce. OP do you have any example of a country that has been experiencing option A, I wouldn't mind considering migrating to the place. This is because all through my life the price of goods and services has never gone down in my country. We have always experienced inflation which has consistently made money worthless.

oktana

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Who wouldn’t go with option A? I do not mind if my salary remains stagnant or even decrease slightly because my purchasing power will increase. I’ll be able to buy even more goods and services with the same amount of money. My financial status will increase even when the salary is stagnant. Unlike option B where (even if by 2%), inflation is affecting me and I would not be able to purchase more goods and services or even purchase the usual amount because the value of the money is reduced.

alastantiger

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As an individual with a unique economic situation from the next person, the first option is what I love. Note that the second option doesn't give an explanation for a lay person to understand. But as a human being with wants and needs , I like the price to fall even if my salary doesn't change. In this case, your budget will be perfect , your plans will be certain. It will be really cool.In short your plans would work and work effectively.

goaldigger

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Inflation is inevitable so having a stagnant salary is not worth it especially if you don’t see any growth anymore with your current job better to look for other source of income to increase your savings and your buying power as well. If you are going to deal with the inflation using an investment strategy consider a less risk investment so you can have the assurance that you can actually beat inflation, though of course investing still have the risk and no guarantee with regards to profit.

Cryptomultiplier

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

To have my savings taxed, is one of the reasons why crypto currencies will remain prevalent in this current state and we may witness a time when banks would have to either expand to accommodate cryptocurrencies or diversify to provide other services that may not include holding funds directly.

Salaries may have to increase during inflation and although it might be a slow process, it is often a time when prices get fixed and never return and New initiatives form just to better adjust to the current situation.

peter0425

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

Of course this one. Although I wouldn’t wish this on to my community because if I were to think of the people whose salaries are lower than mine they’d have a harder time surviving. It’s good for me but it will be hard for the rest.

Quote

B- Having your savings taxed 2%+ a year by inflation.

I can’t see any reason how this is better though.

Faisal2202

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Of the options you gave, the first one is more good looking, because in your way of representing it we are still ahead of the economical finances. And that's gives us a good hand but many people would show frustration in keep getting a stagnant amount of salary as many people have growing minds, and they want progress they don't have stagnant minds that they can work with stagnant salaries.

So for those who want to earn more than what they need to survive would definitely go for the second option. Because there we will have time to learn and practice new skills and to become an entrepreneur but if in the first option we have enough time that we can do something else like with fixed corporate job with fixed salary, if we are able to do online work then definitely the fist option is better one.

arallmuus

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

very ambigous situation here. Scenario A is basically a dream that everyone wants but it wont ever happen. Its simple math, demand and supply so the only way for scenario A to happen is if somehow a huge meteorite hits the earth then it kills like 3/4 of the entire earth population

as for scenario B, its quite ambigous because you dont mention about salary but just savings so Im assuming that if there is huge inflation in this scenario then the salary rate should increase rate so the ideal option to pick would be scenario B. Its more stable rather than having to worry about deflation like scenario A

Upgrade00

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

Do you mean my salary alone or the entire earnings of everyone remains constant against a drop in prices of goods? If it's the latter, it's not economically feasible.

Let's consider a factory for example which produces a commonly used commodity. If they keep paying their workers the same while the cost of the goods they are selling is dropping there will be an imbalance in their gross input and output. To balance it out they'll need to either raise the cost of goods or drop salaries.

mindrust

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.
B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

A is impossible to have in practice. There is no such thing as constructive deflation. Human population is increasing so the money supply increasing as well and increasing the money supply drives the prices higher because the manufacturing can't keep up with the other two. As a result, somebody somewhere has to starve.

We are having the second option because we don't have other choice.

We you look at it we are exactly like viruses, consuming our host till there is nothing left of it.

sunsilk

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Quote from: Alphakilo on May 01, 2024, 01:49:31 PM

Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Obviously, choice A is the best option here. Anything that makes you have a stronger purchase power means that you're having a greater economy.

Whilst for B, you're being taxed and then you are having the lesser purchase power due to inflation. But the reality, no one can skip the inflation and everyone has to go through with it.

That's fine if you're having a stagnant salary and every commodities price are falling but, the reality isn't like that. Undecided

Alpha Marine

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The first option is always the best option.
Right now, a lot of of young people make more money than their parents made at their age but they can't afford the things their parents could afford back in the day.
Having a stagnant income where price of goods keeps reducing is favourable to the salary earner, even tho it might have negative impact on the economy. It even favours those that save more. Their $1000 savings will be able to afford more things than it could a year ago in this scenario.

In today's world, I don't think there's any country where the prices keep falling. It's either the prices remain constant or the increase at very low percentage increases.
As much as inflation is bad for the economy, deflation is not any better. Deflation in an economy means that economy is stagnated and that has a lot of negative impacts.

Findingnemo

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Any day A would be the one I prefer and let me tell you the reasons.

I don't have debts that make me adapt deflation better and can gain financially with the more money I can save if the prices of goods and assets are falling but for the country's economy deflation isn't a good thing, it reduces the cashflow in the economy, strain in your debt payment so people in the middle class again will be struggling to pay their debts.

Alphakilo

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Which of these economic situations would you prefer to find yourself in?

A- Your salary is stagnant but prices fall. Where this happens, your real purchasing power has increased. It's called constructive deflation. And even if your salary falls, but prices fall faster, you are still ahead.

B- Having your savings taxed 2%+ a year by inflation.

Drop your thoughts

Topic: Stagnant Salaries vs. Inflationary Savings Tax (Read 689 times)