Debtors will not repay loans with dollars worth much more than what they borrowed causing massive, systemic default. Widespread default means there are fewer people willing and able to loan money.
Of course that's only a problem for those who are debtors and without money.
Like 90% of the voters in the USA.
Bet on inflation. The Fed is a political animal.
Let's get real. Money supply August 4, 2008: $8,788,900M. March 17, 2014: $12,413,100M. Money supply growth's been steady for decades:
Deflation is a problem in an economy built on debtors.
If there are debtors then there are lenders. Economic activity means there are debtors and lenders. Deflation is a problem in an economy built on economic activity.