Assuming one has stable income, or is sitting on a pile of cash (or stable commodities, like gold), how is deflation bad?
1. Something like 1/3 of the federal budget goes to debt service. Deflation means less economic activity as measured in dollars. At some point the debt service would overwhelm the budget.
2. In a deflationary environment it is advantageous to wait to purchase anything until the future. This results in depression of economic activity which means that there is no such thing as a “stable job” in a broad deflationary environment.
