Can Deflationary Economics save your Economy?

 It has been thought about,  many scholars, and myself,  talking over a beer and a few barbeque steaks...  

Can Deflationary Economics,  save, a countries economy?  What does this mean.

It means, cutting, wages by 0.5 % to 2 %  year...  It means, companies, follow suit to reduce their costing by the same labor reductions...  It has to go on, for, at least, 20 to 50 years to see a real incredible change in value of lifestyle and goods. That benefits the worker.

But, sure, it decreases pricing in your country,  but, people will be in short pain for quite some time, in experiencing a smaller paycheck year to year... Thereby, the reason, to reduce the percentages by very small amounts, year over year... To try to minimize the shock.... In having,  5 to 10 % reductions, are painful, and will definitely put your economy in a heap of trouble.

Once again,  you reduce the wages,  by even a very small amount,  the stock market will in effect probably take a kicking also. The other problem. Very small, changes, in volume of money out  there in the system, usually affects higher priced items... But,  all in all,  it has to reduce stock market gains somewhat... The other problem behind my thinking,  and my scholars beer and steak thinking, on this system of reductions or deflation.

But, if it was done, for a long period of time, the benefits are :  Lower costs for products... Lower wages that compete with other Lower Wage Countries,  bringing back, manufacturing ( perhaps) to your country. Thus, creating much expansion in many ways...

Hard to tell.. Need to really contemplate much, much more, than the basics here listed above... But, Deflationary systems have to go hand in hand with Government Spending Reductions as well... Cutting government fat,  cutting red tape,  making things more efficient always, always helps an economy...

Enough on a system that no one Government will ever take on.. Till next time!