Deflation and forced sustainability

The New York Times has an interesting piece on economic stagnation in Japan, and how it has forced many citizens there to cut back on spending and consumption. Many have lost the upper-middle class lifestyles, and now live with less, often not by choice, now that credit has evaporated. Some are predicting a similar fate for the United States, with a cycle of deflation and lower prices resulting in lower wages and layoffs, producing more of the same. This can be seen at as a bad thing, or it can be looked at as a much-needed correction to how capitalism has worked. It must after all be remembered that sustainability is not just about making biodegradable diapers, but also about making our way of life financially sustainable. Runaway credit and real estate markets are not the way to do this.

Japan, Once Dynamic, Is Disheartened by Decline – NYTimes.com.

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