[expat_panama]

We’re told that deflation is a bad thing, but the history of deflation in the US allowed resets of price levels to their proper market level...

Some how this is sounding like a converstion we've already gone through though I may be confused here, but most people's history shows pricing resets from deflation coming with an enormous destruction of wealth and unspeakable human suffering.  There are many folks on these threads that don't see it, and everyone has all the facts available on line to see for themselves.  My experience in sharing what we all got is that when someone falls in love w/ deflation they fall madly and deeply.

Wickard for reference: http://en.wikipedia.org/wiki/Wickard_v._Filburn

The Court decided that Filburn's wheat growing activities reduced the amount of wheat he would buy for chicken feed on the open market, and because wheat was traded nationally, Filburn's production of more wheat than he was allotted was affecting interstate commerce. Thus, Filburn's production could be regulated by the federal government.

Truly amazing!  That logic could be applied without any logical limit; a couple wanting to have one child could be told that the amount of children they have affects the amount of food and clothing they'd need to buy on the open market...

[1010RD]

Having the FED manage the economy hasn't reduced volatility.

tradingeconomics.com

While the growth we've seen is simply driven by market dynamics via technological growth.

Where's all the damage due to the many deflations pre-FED? We let the market decide and had very flexible booms and busts that allowed resets to occur and new, often explosive growth to occur. Today we're trapped by debt contracts that cannot ever be unwound. We're better off today in spite of, not because of the FED.

The market and technological growth are the real drivers. Managing economies is the thing of central planners. It's soviet thinking.