# Could Inflation Be A Good Thing?

by

There are a lot of logical fallacies that rely on our unwillingness to think for ourselves (like Appeals to Authority, Jedi Mind Tricks, or The Fallacy of The Single Cause). One logical fallacy that REALLY bugs me is the Appeal to Statistics, using a plethora of numbers to blind-side someone into another way of thinking, whether those numbers are accurate or not.

People who know me personally, know that I rarely take anything at face value. If there’s a “widely accepted fact” out there, I tend to question it, mostly because I know that despite the “wisdom of crowds,” there’s a big danger in group-think.

Before I go any further, yes, I know that inflation is simply an expansion of the money supply by artificial means, but for the purposes of this article, I’m going to refer to price inflation … what the average person thinks of when they see a gallon of milk double in price.

I was thinking about a television I currently own – a 19 inch traditional set that I bought with my roommate in college back 24 years ago. I still own it! How much did we pay back in 1986? If I remember correctly, somewhere in the neighborhood of \$139. Today, I can buy an HD flat screen LCD 19 inch model at Walmart for … you guessed it … \$139. The temptation I’m facing is to replace my old beat up set with a sleek newer one. But what if that new set was MUCH higher in price? What if it had actually kept up with inflation and was \$268? I think the temptation wouldn’t be there as much.

### What if EVERYTHING were much higher in price?

What would happen tomorrow if the price of everything went up 50% but your paycheck remained the same? I know a lot of people claim that scenario has already happened, but apparently not with televisions.

If the price of everything suddenly went up by a significant amount, you and I would:

1. Stop throwing away so much food. I think we would become better at preparing meals at home, at learning to love leftovers, and at using the coupons we blithely throw in the trash.

2. We would demand higher quality products all around. Today’s television sets (in keeping with the TV theme), are designed to only last 5 years or so. That’s just the nature of the technology. The automakers called it “planned obsolescence” and it eventually came back to bite them in the rear when people realized that foreign made cars were higher quality. It’s taken years for the big three automakers to mount a comeback, and two may or may not make it.

3. We would fix what was broken rather than rush to replace it. Today, we’re too easily tempted to just throw out the old TV, the old bicycle, the old hairbrush, the old vacuum cleaner, or the old radio and run down to Target or Walmart and buy a new one. If the new price were twice what it is today, I think we’d be much more willing to learn how to repair things … kinda like our grandparents did several generations ago.

4. We would stop buying disposable anything. Have you ever though about everything you and I buy that’s disposable? Diapers, razors, eating utensils, cameras, ponchos, toys, wrapping paper, bows, tissues, shopping bags, ink cartridges, pens, or any very cheap item that we find easier (cheaper?) to toss than repair.

If inflation doubled the price of everything, we would become much more conservative in everything we do. From the way and amount we drive, to the amount of energy we consume, to the style and type of houses we buy, everything would change. We would take different vacations, live more closely to family, and consider the consequences of our decisions (financial and otherwise) much more carefully.

I know inflation is the bane of a politician’s existence, but there could be a silver lining to this coming cloud. It all depends on how you look at it.

Ron has written 1082 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a partner in a national building materials company.

If you enjoyed what you just read and would like to get FREE email updates with the freshest articles from The Wisdom Journal delivered right to your inbox, subscribe today! It's ridiculously easy and you can unsubscribe at any time. Since your email address is never sold or abused, you can subscribe with confidence, PLUS you'll get free reports/guides/eBooks, subscriber only benefits, and other perks.

The Biz of Life

Inflation actually rewards big debtors like Uncle Sam and hurts savers. In the long run, it makes everybody poorer. Most people blogging today have only lived through periods of low inflation and don’t know what 12 – 15% mortgage rates are like. I wouldn’t wish that on anyone.

Ron

Me neither. Unfortunately we’re headed that direction …

Kevin Lucas

Great post and I like your perspective. While I do believe that inflation would help many relearn the value of money, would it also start a more severe recession because everyone is being conservative with spending again. Then again maybe a back to back recession is what we need to inspire more growth in entrepreneurship and less dependence in large corporations.

Natalie@ Auto Insurance Extras

hey Ron! Unfortunately, I have to agree with you. I think the appeal to statistics fallacy is all too common now days. If only we could trust those numbers or the organizations that fund the studies–but that is a completely different issue to consider. I agree, maybe inflation won’t be so bad. Americans are so frivolous. I think your ideas are right on. No one wants inflation, but maybe it will force us to be more conservative, and minimize our environmental impact at the same time. I think it’s great that you were able to find the positive aspects of something that is sometimes felt to be so negative. Most people have a hard time doing that, very refreshing, thanks!

Kelley

So you imagine that people would be better off if they had far less personal assets and income. Worse, you think it might indeed be a good idea if politicians imposed such conditions on the public by stealing their money (..thru currency debasement).

Complete Nonsense… both pragmatically and ethically.

You flip fundamental economic principles on their head.

You’re advocating a lower standard-of-living & well-being for human beings.

If EVERYTHING were much higher in price, it wouldn’t just be televisions & consumer goods — but also dental care, medical care, education, transportation, fuel for winter heating, basic foodstuffs, potable water, basic sanitation services, aid to the poor/disabled, etc. etc.

Lower socio-economic groups, especially, would be devastated by a 50% loss in purchasing power of their incomes.

If you dream of a simpler, more frugal life… it’s very easy to do — just give half your net income/assets to government-politicians or charity now. You could also move to a 3rd World developing country and easily adopt the lifestyle of the mass of people there.

Please re-consider this silly Monday-morning whim.

Ron

You obviously missed the point of my “whim.” There is zero “advocacy” in what I wrote. And chiding me about my ethics is a classic ad hominem attack. Please stick to the facts of what I wrote rather than allowing emotion to dictate how you respond.

Inflation IS coming and I’m NOT advocating it. All I’m saying is that as it erodes our purchasing power, there will be an opportunity for you and me to alter how we look at our money and make our decisions with it.

Telling me to give half my money away to inefficient government bureaucrats to waste on their pet projects is a bit childish and more of a knee-jerk reaction rather than a well thought out response.

You need to go back and re-read the post. There is nothing in there than should lead you to believe that I’m advocating anything other than spending your money smartly and looking for the positive in what is a looming economic storm. The fact is, inflation will alter YOUR life in just the ways I mentioned (along with many others). To think that I believe it’s a good idea is asinine.

Andrzej

Now that’s interesting point of view. I just hope that if ever inflation will go that high, people will start to thing more often. Not that they can’t do it since today that is…

Previous post:

Next post: