ROBERT POLLIN interviewed by PAUL JAY
Paul Jay: But if you own government bonds, aren’t you doing fine with deflation? ‘Cause now your 3 percent is worth even more, and when you cash out your bond, your dollars buy even more. So you might actually like deflation.
Robert Pollin: Again, that’s very short-term, narrow thinking, because if we think about the financial system as a whole, if we already have a very fragile financial system, if you have a deflation and on average it’s more difficult for everybody to pay off their debts, we will have more debt defaults. The kind of things that happened, you know, a year and a half ago will certainly reemerge. Ordinary people will start defaulting, foreclosing. That will inevitably happen as a consequence of deflation.
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