[LouD]

Interesting (and sobering) article.

Some good points about inflation versus deflation. I've always thought it was economic hubris to assume that we could achieve equilibrium at the razor's edge of zero inflation or deflation.

Moreover, for every argument against inflation (old people eating cat food because their the purchasing power of their passbook savings account has eroded) there was a countrbalancing argument for inflation (the student who borrows heavily to finance his education, and then pays back the loans with dollars worth less than those he borrowed).

It is probably better, not to mention easier, to have low, but consistent and predictable inflation, rather than attempting to achieve zero inflation. That is, assuming we could preclude the inflation driven expansion of the public sector that was fueled by bracket creep and capital gains that in the past consisted largely of inflated prices, not value appreciation.

[dtel]

Inflation can only really work if all thing are inflated equally.
The tendency is for wages to stagnate or deflate and "stuff" to inflate.
Thus you make the same or less and things cost more, it can't go like that forever.
A carpenter still amkes $15 an hour, now instead of paying for a 100K home he is paying for a 200K home.
Thus the wife or live in must also work to make the bills.
The gov loves this, double the taxes, double the fun.