The unemployed will certainly do better with lower prices
We agree
Globally the US didn't have deflation
Government computed inflation (therefore minimised) :
2008 3.8%
2009 -0.4%
2010 1.6%
They went more into debt, started QE putting more air in the real estate bubble and in the US bubble : more of the problem to solve the problem like always to avoid a necessary recession, like Bush before; Greenspan had set higher interest rates than Bernanke and that created the housing bubble!!
Credit is a double-edged sword. You're absolutely right that it can be bad for the economy, but it does increase growth when used well. Lots of easy credit leads to spectacular busts, but it also leads to spectacular booms. The economy would be a lot more stable without it, but it would grow more slowly.
Think it would grow more
Credit is good if you get a return higher than the interest rate thus if you invest the money well
Consumer prices are very much affected by some markets, especially the commodities.
Yes
And btw, there's still some risk in money market securities. We haven't seen a crisis bad enough to really jeopardize the money markets, but it's possible.
It did jeopardize the money markets in 2008 but the government intervenes and guaranteed the funds, they double the bet once again and got lucky, remember?
The US has been printing money at an insane rate the past several years, and it's worked so far, but it can't go on forever.
No amount of money printing will be able to save the situation.
YESIf that happens in a disorderly, crisis-like fashion, the whole world is screwed.
Disagree here, most if not all countries will suffer at first but it will be great for hard working countries with natural ressources low taxes and regulation and high saving rate
You say what you think people should do. But I say what actually happens and has happened many times in the past. This may seem counterintuitive and working against logic, but human psychology is not about logic. And it is surely not what you think it should be.
Do you buy less when the price goes down? Give me exemples of when YOU buy less when the price goes down!
Japan experienced deflation in 90s with falling prices.
They have been buying like crazy and saving like crazy as well; Japan problems don't come from deflation, you have been too long in school or you are reading Bloomberg
Prices went up recently and they consume way less now with abenomics