Stagnant Salaries vs. Inflationary Savings Tax

[Juse14]

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.

[Smack That Ace]

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.

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.

[CODE200]

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.

[davis196]

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.

[wxa7115]

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.

[MissNonFall9]

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.

[legendbtc]

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.

[Zanab247]

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.

[Hamphser]

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.

[shield132]

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.

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.

[ndutndut]

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.”

[Ryu_Ar1]

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 .

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.

[btc_angela]

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.

[Mr.right85]

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.

[Bitco55]

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.

[lepbagong]

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.

[blckhawk]

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.

[wxa7115]

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.

[Strongkored]

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.

[justdimin]

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.