Let's see what you've done here. You've shown that rich people don't hold any money because they invest it, and i'm afraid poor people don't hold any money because, by the time they get their paycheck, all the bills are due -- they pay those off and run up that evol CC & get 1% cash back. So according to you, inflation doesn't hurt anyone.
Perhaps by "poor people" you mean people who are extremely poor. But there are plenty of poor people who save up to put a down payment on a car. There are plenty of poor people who save to put their kids through college.
Lolz, "saving up for a car down payment"? Just how many years do you think these "middle-of-the-road poor" spend saving up to buy a car? If it's less than 2 years, the last 2 years would have devastated their savings by ~3 percent (unless they put all the money in their mattress (savings accounts pay interest) at the start of the first year, in which case they're simply stupid -- they should have bought the car two years ago). I don't reach for contrived examples, so stop, pl0x.
As far as eroding the real value of (the poor's) paychecks, that's what raises are for, JoelKatz. Even the minimum wage gets bumped up once in awhile.
If salaries stayed the same in real terms, employers would have to negotiate reductions in salary to reduce salaries in real terms and every time an employee got a raise, it would be a real increase in their salary. But inflation games the system such that employees have to get regular raises just to stay put. This gives a huge advantage to the employer because he wins if no deal is struck.
This is simply absurd -- you're saying that the employer wins when his workers quit? If you feel that it's more profitable to search for, interview, train & risk new employees than it is to offer a 2% yearly raise, you should learn more about economics and the real world -- both will be full of surprises.
The more your job pays and the more educated you are, the more likely that you can negotiate regular increases in your salary to keep up with inflation and even outpace it. The less your job pays, the less educated you are, and the more you are replaceable by others who do the same job, the less likely you can get your salary to keep up with inflation. Lawyers, CEOs, and professional athletes don't have much trouble, but cashiers, fast food cooks, and farm workers find it a bit more difficult.
Awesome incentive to get an education/ become skilled labor? The poor always get screwed, but they get screwed more in a deflationary system. Much more. OOdles more, JoelKatz.
And, of course, if you're talking about a pension or social security, you cannot negotiate a raise.
And, of course, this is an entirely unrelated issue. If inflation rates skyrocket, your pension is worth much less than you expected it to be. This shows that *escalating* inflation rates are bad, but says nothing about inflation as a whole. That's why economy is like a beauuutiful garden, JoelKatz -- too little water, and it withers, too much -- it rots. That's why my gardener lives so well
