” I’m talking Zimbabwe and Weimar Germany kinds of wrecked economies,”
Well, if you want to limit the type of damage to only that which is caused by inflation, then no. Defaltion doesn’t cause that. :)
Indeed. Ok the opposite then, where nobody buys anything or hires people. I just don’t see how a working economy could fail because economic activity — sales and employment — drops so low by people choosing not to spend money (as opposed to people not spending money because they’re broke) that it just collapses.
But I admit that I might have been simply making the argument that deflation by itself can’t wreck an economy. I suppose the current situation, where the economy is already on the ropes, is where the question of deflation matters. And on that question, I’m of the opinion that it’s a boogie-man. As somebody mentioned earlier, people still buy electronics knowing that they can get something fancier shmancier for the same money next year. The brief illusion that individuals had to keep themselves at maximum debt in order to live a good life is over, and that’s what I think is scaring the economists.