[Straw]

Although I agree wholeheartedly with the economic logic, I have a couple of minor counterpoints:

1. Constant 2% inflation at least doesn't have the negative effects of unpredictable inflation, its just a 2% tax.

2. Certain prices appear to be slightly sticky in that they don't go down, for example, wages are almost never cut in nominal terms, for psychological/cultural reasons- people tend to quit if their wages get cut. Slight inflation allows these to slowly decrease without running into the asymmetric price stickiness behavior.

What do you think?

[WalterBright]

I'm actually ok with a 2% inflation rate as a means of funding the government. I just wish the Fed and the government would be honest about it. I don't like losing all respect for the officials pushing the propaganda.