[chad_oliver]

You have a very good point, and I hadn't considered that aspect. However, if people defer their consumption, surely they'll also have less need to spend money, and thus less incentive to perform economically productive activities in order to earn money to spend? I'm sure people will be quite happy in the short term, but over longer periods (decades) there will be much less effort (not necessarily money) invested in economic activity.

[sliverstorm]

Yup, that's basically the problem with deflation. It stagnates the economy, and it is self-reinforcing. Called a deflationary spiral.

[seanmcdirmid]

Deflation is the easiest way to turn a recession into a depression.