Quote from: Vector on October 09, 2011, 11:31:43 PM

Inflation in it's natural form (supply/demand) isn't taxation at all.

But probably the worst reason for what I proposed originally is that it doesn't account for deflation spirals. If people see that deflation is occurring in the front of a supermarket, they will hold from buying for hopes of a future price decrease, furthering deflation. A situation where you probably want to have some type of 3rd party to stem that from happening.

That's a misuse of the word inflation. Inflation is only a change in the monetary supply. Prices can change with or without inflation.

Of course to the extent that buyers withhold spending because they expect prices to decrease, this is a great thing for the economy. Increased savings and decreased consumption results in capital accumulation and increased standards of living for all. Why would you want to keep that from happening? Of course they can't withhold spending altogether due to the inexorable fact of time preference and their own mortality.