Because its a claim. A claim is not less valid if you don't claim it. That kind of defeats the purpose of a claim. You contributed to society and you have a right to something in return.
This argument assumes there is a fixed amount of wealth in the world and you're taking some share that would otherwise go to someone else.
At the time the claim is created (you're paid your salary, you have a liquidity event, ...) you can exchange it for some quantity of goods and services roughly proportional to (the market's appraisal of) the social value you've contributed. If you stash that claim under your mattress, should it be equal to the _exact same_ quantity of goods and services 10 years in the future? 100 years?
If instead you stored the value you created (the lumber you fell and milled, the clothes you manufactured, the messages your software conveyed, the student you educated, ...) under your mattress for 10-100 years we would not expect them to have exactly the same utility they did at deposit
Money should be a _more_ efficient store of value than anything we might exchange it for, but I don't think it's clear that it should be a perfect store of value. If you want to maintain a claim on a fixed quantity of goods and services, you should have to contribute to the investments required to maintain the productive capacity to deliver those goods and services.
A monetary policy targeting stable, low, but positive inflation balances savers' need for a risk-free store of value with the social need for continued investment and consumption.
> A monetary policy targeting stable, low, but positive inflation balances savers' need for a risk-free store of value with the social need for continued investment and consumption.
I think both these purposes are served with zero or deflation. As a saver, I don't like my dollars being depreciated and people on fixed income also don't like that. And as someone who wants to promote investments, a lower deflation rate reduces my minimum expected return since it doesn't have to clear some inflation hurdle rate. And for consumption, like I mentioned in my original post, the hottest selling items are rapidly depreciating, so I don't think it would negatively effect consumption. So the only one the inflationary system works for are the politicians that use money printing as a backdoor form of taxation
Deflation means that I can make money (or more precisely, value) simply by leaving what I have in cash. That doesn't promote investment; it promotes hoarding.
That's the same as investment. If a part of society's resources aren't directed towards consumption, they are directed towards enabling future consumption. It's a tautology in economics that savings equals investment.
It's the same thing in economics. It causes the government to print more money to make up for the money missing from circulation, which will be invested. If the government doesn't do that, it increases the value of all other money in circulation.
But that’s under some weird, incorrect model of how money works. Presumably if we go down this route any further you’ll start talking about IS/LM and the money multiplier. All models are wrong, but there’s a better model that involves capital constraints and the Basel accords.
In any case, one of the major failings of modern macro is to assume you can think your way around the implications of economic actions. You have no way of knowing the consequences of stashing money under a mattress unless you actually do it, and even then there’s no guarantee the effect will be the same across different economies and in different eras. The world is just too complex for that.
This argument assumes there is a fixed amount of wealth in the world and you're taking some share that would otherwise go to someone else.