Any amount of money, as long as it is sufficiently divisible, is capable of facilitating trade within an economy. The idea that somehow money has to increase over time is one of the most non-sensical idea.
"Thus inflation becomes the most important psychological resource of any economic policy whose consequences have to be concealed; and so in this sense it can be called an instrument of unpopular, i.e. of anti-democratic, policy, since by misleading public opinion it makes possible the continued existence of a system of government that would have no hope of the consent of the people if the circumstances were clearly laid before them."
It doesn't, proof of work is what makes Bitcoin unique.
(1) Having to spend physical resources better aligns incentives
(2) Proof of work is decentralized and fair
What you're paying for is essentially to signal to employer that you've been able to make it into a very select club which is in turn acting as a proxy for intelligence/conscientiousness. As long as the seats are be limited, it will be worth the cost.
Computers have been deflationary since their inception (you can get a better computer for the same money if you wait a year) but people will always value the present more then the future, that's why we've been buying computers regardless. The same principle could apply in theory to other asset classes, you want a house now even though you could get a better one in the future because you value comfort today rather then tomorrow. Spending isn't driven by inflation, it's driven by knowing we have limited time to live.
Devaluing money doesn't create wealth, increased in productivity does. Devaluing money in many instances lowers productivity because people have to invest time into protecting the value of their labor instead of making more stuff they are good at. I haven't read a single convincing explanation as to why encouraging consumption somehow generates more wealth on the long run.
> There’s a reason we have target rates
In an interview Powell admitted no one really knows why the target is 2%. Why is 2% better than 10%, why not 0%? We don't need to encourage consumption with artificial money devaluation, humans already discount the future because of the finiteness of our lives
Asset and income denominated in some currency which is also an imaginary concept that we decided to all agree on was worth something. Not much different if you ask me
"Thus inflation becomes the most important psychological resource of any economic policy whose consequences have to be concealed; and so in this sense it can be called an instrument of unpopular, i.e. of anti-democratic, policy, since by misleading public opinion it makes possible the continued existence of a system of government that would have no hope of the consent of the people if the circumstances were clearly laid before them."