| >A healthy economy will, in most cases, exhibit inflation. A healthy economy will exhibit monetary inflation as it grows. But there's no reason for it to exhibit price inflation. >The government has to print more money to keep up, otherwise it will fall short of people's needs. That's a circular argument. It's not like people in a deflationary environment don't have any money - they have less money, but that money is worth more. >There's a huge benefit. We want to encourage economic activity over inactivity. Sure. I'm just not convinced getting people to go into debt really does that. Oh, it does in the short run. But once your debts start to pile up not only do you have to pay for the things you've already purchased, but you have to pay interest. If, instead of borrowing money, you'd just bought things as you could afford them, you would end up spending more. >Money borrowed is money invested. No, money borrowed is money spent. Sometimes that's investment. Sometimes it's not. If I borrow money to buy a bed made in China, that's not helping the US economy very much. The idea deflation is bad for an economy doesn't hold up to historical scrutiny. The US grew strongly in the 19th century (far more strongly than today), and during that time it experienced long periods of growth accompanied by low deflation. People still have to buy food, pay the rent, buy clothes, etc even when the currency is deflating. |