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> I've always heard that deflation is awful and must be avoided.

That doesn't mean anything. People talk about god/gods all the time, it doesn't mean they are real or exist.

Inflation/Deflation are meaningless without linking them to the system in question. Growth also, in my opinion, has little to do with inflation/deflation and more about the positive inflow of energy into the economy.



We had a system. We saw deflationary collapses in that system. We've seen them. They're real, and they are very destructive.

So we mostly kept the same system, but tried to tweak them to make deflation 1) much rarer and 2) less destructive.


What system collapsed due to deflation?


I didn't say the system collapsed. I said we saw deflationary collapses within the system.

Look at the Panic of 1893, the Panic of 1907, and the Great Depression. If that's not enough, there are several others.




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