I have no idea where you're getting your opinion about "deflation doom sayers" from.
But you're right that the system has some bistability. A deflationary spiral with declining production and lifestyle can sustain itself for a long time. It is also sustainable to maintain a moderate inflationary spiral with ever increasing production and improving lifestyle.
Given that choice, isn't it obvious why bankers try to keep the latter option going?
But it is not actually bistable. Keeping moderate inflation going requires continual intervention. It is easy to fall off the rails into a hyper-inflationary disaster. It is easy to fall off the rails the other way into a deflationary disaster. And continued success creates the moral hazard of overconfidence in the stability of the system. This overconfidence leads to risky behavior which in the end WILL result in disaster.
We came close to that in 2008.
It is unclear to me whether it is better to have regular smaller disasters, or occasional large ones. But pushing off the next disaster is always better in the short run.
The classic story about the deflation bogeyman is that if prices will be lower tomorrow, people won't buy things today. This is demonstrably false with regards to technology purchases, and obviously false with regards to necessities like food. People may delay purchases, but this is a good thing if say you're concerned about resource depletion or general efficiency.
I'd say we're in the making of a hyper-inflationary disaster, as central banks continue to apply their top-down prescription of "productivity", forcing people to work full time make-work jobs (eg FIRE) rather than letting the majority slowly build up savings and create economic conditions that naturally lead to working less (as one would expect from uh, technological progress). The message just won't be received until the petrodollar has completely disintegrated though.
The deflationary spiral only starts to set in when the increase in wealth due to deflation competes with the potential increase in wealth from trying to use capital productively.
So it isn't necessarily a problem if you can wait a year and then buy a better computer with the same money. But it IS a problem if your best investment strategy for that year would have been to put the money under the mattress instead of loaning it out, investing in stocks, or some other activity that keeps money circulating.
As for a hyper-inflationary disaster, the exact monetary injection you use to stave off deflation can also create inflation. This is why central banks have such a challenge on their hands. They are trying to balance the economy between nasty extremes, while trying to satisfy contradictory goals.
But you're right that the system has some bistability. A deflationary spiral with declining production and lifestyle can sustain itself for a long time. It is also sustainable to maintain a moderate inflationary spiral with ever increasing production and improving lifestyle.
Given that choice, isn't it obvious why bankers try to keep the latter option going?
But it is not actually bistable. Keeping moderate inflation going requires continual intervention. It is easy to fall off the rails into a hyper-inflationary disaster. It is easy to fall off the rails the other way into a deflationary disaster. And continued success creates the moral hazard of overconfidence in the stability of the system. This overconfidence leads to risky behavior which in the end WILL result in disaster.
We came close to that in 2008.
It is unclear to me whether it is better to have regular smaller disasters, or occasional large ones. But pushing off the next disaster is always better in the short run.