fiat moneys purpose is to be spent. inflation and QE drops value to push people into spending it and keep money moving/changing hands/ so that they can tax it at each hand it passes..
if a fiat economy was to be deflationary, people would save and hoard money and not spend it which means governments couldnt tax it.
think about it. (imagine 10% tax at each hand it passes)
when 20 people buy something for $1k each from a shop. instantly there is $100 per purchase deducted from that amount due to sales tax. leaving $900 in circulation per person
($20k to $18k)
when the retailer spends its $18k on 10 members of staff wages, their $1.8k is deducted 10% of income tax)
leaving staff with $1.62k ($20k down to $16.2k)
if fiat was deflationary. people wouldnt spend as often and instead hoard it. meaning the cycles of tax going to government would be less amounts going to them. meaning they can hoard as much to then get more value later.
..
so imagine instead of government having $3.8k in treasury.. in a deflationary system even if still taxed at 10%.. people would spend less per cycle meaning the government wont get $3.8k from that demo example. and next months cycle would be even less, where each month is less and less. until a government gets very little each month.
governments hate it when they get less and people keep more. it makes the government be less and less important.
they want poor people. they want to be the providers of services to the poor/needy because without anyone having needs that people can self fund. governments would not be needed and taxes would not be needed.
governments will always have a inflationary currency and always tax people. as it is the only way they can stay relevant and needed,