Everyone is overcomplicating this. Deflation is inherent to Bitcoin as the supply of coins is fixed. In the real economy, this is not the case as the central bank can manipulate it any way it wants. Deflation is as harmful as inflation.

Deflation is bad because it causes people to hold on to their money: why would they spend it if the value of their money keeps getting bigger? And no spending = no growth, so it's bad for the economy.