• toastmeister@lemmy.ca
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    4 days ago

    Capitalism can exist on a gold standard, or a barter system of goods, which if we were on those systems then a shrinking population would do nothing inherently negative.

    The thing that breaks with a declining birth rate is monetary policy, which requires an ever growing money supply because we’ve designed a 2% inflation target, which means growing consumption via debt monetization. The reason for 2% inflation is to monetize our debt, in order to force people onto the risk curve for economic growth; we grow the money supply about 6% a year to achieve 2% inflation due to technological advances and a broken CPI index.