Quote:
Originally Posted by donquixote99
With inflation, people try to get rid of cash. With deflation, it's stuff that's dropping in value, so people try to get rid of inventory. This basically means not making anything--no one likes making stuff that's going to drop in value. people get laid off left and right, which drives down demand, so there's more downward pressure on prices, and more layoffs.
This was the great depression. Death spiral.
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Yes
imagine that the economy is a tire that has gone flat because there is no demand at all. Prices are too low to stimulate production i.e. employment.
In the Depression food produce from farms was so low in prices that it did not pay to transport items to market. Thus the AAA under Wallace (I think) paid farmers to destroy crops and kill young pigs (who never got to enjoy their pigginess lol) in order to raise prices by decreasing supply.
the forefather of the farm subsidy which the Baggers love today btw
I do not know if it came to actually killing piglets but I am pretty sure Wallace proposed it.
ok some other History major help me out do not feel like goggleing it lol