That doesn't fix anything. If it is a directly proportional function, then there isn't really enough incentive for spending now vs later. Because it is directly proportional, all that it does is change the prices that people are willing to accept on both sides of the table. It would cause some problems early on, but eventually, the market would stabilize and you'd have to find some other way of upsetting it again.
I'm not advocating this, but it isnt as easy as that to dismiss. there is a whole economic school proposing this for "regular" money.
google "freigeld" or "freiwirtschaft". I'm not sure though how many resources you'll find in english since it was started by a german:
http://en.wikipedia.org/wiki/Silvio_GesellExactly. Not to mention that basically bitcoins would be worthless and would disappear since nobody would want to hold them.
thats the point. > velocity of money