What?? This isn’t correct at all. A deflationary economic environment is bad no matter the fiscal policy or monetary policy we have in place. You propose it would be better if we pushed for savings. Well if we all know that prices in a few weeks/months/years will be less than today, then spending drops. Friedman pushed velocity of money, even he would agree that a lower velocity would crush an economy.
I never got this line of thinking. I'm already disincentivized from spending because simple investments are likely to outpace inflation. That's a good reason to save as much as I can, but I still buy things, and it's not like I can put off buying food for a year so that prices drop. What's so different about this incentive to save and it being a part of the economy?
Yes, because most people spend most of their money. I'm saying deflation seems unlikely to change that, since a strong incentive to save money already exists, in the form of retirement fund.
