[thaumasiotes]

> 2% annual inflation isn't a big deal, but 2% annual deflation would make all the money disappear in less than a year? How can that be so?

There's no symmetry between inflation and deflation. Your incredulity is unwarranted.

Money is an accounting method to enable easy trade. Ordinarily, it's worthless, which makes it available to be used in transactions. Under deflation, money gains an inherent value -- you can multiply your worth by holding on to the money you have now. This means that much less trade occurs, because the gains from that trade are less than the gains from holding on to your cash while it appreciates. But the gains from cash appreciation are in an important sense hallucinatory -- on a system level, they don't exist -- and the gains from trade are real, so the economy just ends up being crippled.