[Olog-hai]

Hmm. Hyperinflation as rock and deflation as hard place?

[Gritty]

Trillions being added without end to our national credit card and prices (other than on gasoline) going up every week on almost everything else means "deflation" is hardly the big problem of those who work and must pay the bills.

Check out Russia today and see where we are headed tomorrow.

[Spartan79]

Statists love inflation, when it is combined with progressive taxation of income. As nominal incomes rise the government’s take, as a precedent of total income, steadily creeps up as more and more of the subjects move into higher tax brackets, even if their real incomes remain static or even decrease. This without the pols having to ever actually vote for an increase in tax rates, and by doing so incur the voters’ wrath.

On the flip side, deflation would produce the opposite result: as price and income levels fall, the government’s share of the pie declines, as the subjects slip into lower brackets.

So, yes, the government hates deflation and loves inflation.

This is also why statists would not prefer a consumption tax as opposed to a progressive income tax. Under a consumption tax the government’s share of total economic pie would not increase automatically; to increase the government’s take, pols would have to vote to increase the rate.

[CPT Clay]

It is ‘disinflation’ as opposed to deflation.

[Chgogal]

BFLR