Deflation

Economists are telling us that deflation is worse than inflation. The theory is that inflation is a friend to the borrower allowing him or her to pay back money borrowed today with cheaper money earned tomorrow. However, most Americans have been faced with inflationary costs and lower salaries. As well paying manufacturing jobs have been sent out of the country, most of the displaced employees have had to find jobs in the "service" sector (Can you say Walmart?). Service sector jobs are on the low end of the wage scale in this country and hardworking employees can find themselves in the $30K to 50K range at best. There are just to many people who are qualified for these jobs, and supply and demand dictates the wage. The problem isn't inflation vs. deflation. It's an unnatural demand for products that are unnecessary. If companies make necessary products people will buy them. If they have to borrow to buy them they will. Then companies can hire more help to make the necessary products. American auto companies know this. They used to make cars that only lasted 3 to 5 years before they would start falling apart. Then foreign companies started making cars that last 5 to 10 years before they start falling apart. Americans started buying better made cars from whomsoever would make them and now they don't need to buy new cars every 3 to 5 years and have discovered that they can't afford the luxury of supporting the American auto industry. The cell phone users will eventually make the same discovery. Then the personal computer users, video game users, music fans, etc. It's like grandpa said: "If you make a better mousetrap, America will beat a path to your door!", but if your mousetrap works it doesn't need a new coat of paint every time it catches a mouse.