It's amazing that on a website dedicated to fiscal responsibility people would advocate for fiscally irresponsible policies. Inflation is good for borrowers (people who are in debt - like our federal government), it's bad for savers and bad for consumers.
Consumers want falling prices, they are GOOD for consumers. The notion that falling prices provide a disincentive to the consumer is a logical fallacy which presumes that they have something to gain by forever stocking up on dollars (paper, which has no utility other than serving as a medium for exchange). We're all savers on this website, correct? Why are we saving our money? We're saving it because we plan to SPEND IT later, not because it has some sort of artistic value like the Mona Lisa. If you're having trouble wrapping your mind around this concept because you've been taught so differently by those who have something to gain by inflationary policies (ie., our government and academia), ask yourself one question. Which consumer has more purchasing power with their dollars: the one in a deflationary environment where prices of goods are falling, or the one in an inflationary environment where the purchasing power of those dollars is being eroded as prices are rising?
Along the same lines, while inflation is good for borrowers, deflation is bad for borrowers. They tell us that deflation means that borrowers would have to pay back loans in dollars that are more valuable than the ones they borrowed (duh!). Deflation provides a disincentive to go into debt (remember the phrase, "hair on fire?") and an incentive to use current savings for investment (remember: investment = risk) purposes instead of borrowed funds ("borrowed" = bigger risk, but we ALL know that already).
Take a look a few industries with either falling prices (deflation) or rising prices (inflation) and ask yourself which seems to be working out better for the consumer.
Computers and electronics in general are a case study in how falling prices impact all of us. Remember 25 years ago when a pc would run $2000 and all you got was a lousy 40 mb hard drive and a bulky 14" crt monitor. Hardly anyone even had one in their home. Today, for less than $500 you can buy a fancy portable laptop with a 500 gb hard drive and a big, bright, high definition touch screen. It's now more unusual to NOT have a pc than it is to have multiple pc's at home. How could this possibly happen if deflation is so terrible? Could it be because companies like Microsoft and Intel have come along and done things more efficiently than their predecessors? Companies like Apple and Google are now worth nearly $1 trillion, while Bill Gates doesn't seem to be hurting for money either, so it doesn't really jive that deflation hurts businesses either, does it?
On the other hand, look at industries where prices are rising like the healthcare industry or higher education. The higher ups seem to be doing quite well, just like they are in the industries where we see falling prices rather than rising prices (hmm....could it be that they're ALWAYS going to find a way to make mega-profits no matter the economic environment?), but the consumers are suffering terribly. No longer can we afford healthcare, while many economists are saying that the student debt (there's that ugly "D" word again!) bubble is going to be the next big bubble to burst and could lead to a "lost generation" as is evidence by the record number of boomerang children coming back home to live with mom and dad because they can't support themselves even after spending $40,000 for a college education that could be had 2-3 decades ago for less than $10,000. But I thought inflation was supposed to be a good thing? Isn't it?
To summarize, in the words of economist Murray Rothbard:
...rather than a problem to be dreaded and combatted, falling prices through increased production is a wonderful long-run tendency of untrammelled capitalism. The trend of the Industrial Revolution in the West was falling prices, which spread an increased standard of living to every person; falling costs, which maintained general profitability of business; and stable monetary wage rates—which reflected steadily increasing real wages in terms of purchasing power. This is a process to be hailed and welcomed rather than to be stamped out.