> that's why we can't ever have some deflation here in the modern US, it would reduce tax revenue
Deflation also increases the buying power of that tax revenue.
We avoid deflation because it incentivises hoarding currency over productive activity. We also know how to stop inflation--raise rates. We don't have reliable tools for fighting deflation (see: Japan).
(Also, it's not true that we've never seen deflation. Around the financial crisis, we saw negative CPI.)
>> We avoid deflation because it incentivises hoarding currency over productive activity.
No, it incentivises reasonable spending on things you need and saving the rest over mindlessly throwing money on useless crap because your money lose value every day.
> over mindlessly throwing money on useless crap because your money lose value every day
Your have more choices than spending and hoarding. Buying Treasuries, for instance, yield around inflation. (TIPs if you're more worried.) To say nothing of the entire universe of investable assets, from commercial paper to venture capital.
Deflation also increases the buying power of that tax revenue.
We avoid deflation because it incentivises hoarding currency over productive activity. We also know how to stop inflation--raise rates. We don't have reliable tools for fighting deflation (see: Japan).
(Also, it's not true that we've never seen deflation. Around the financial crisis, we saw negative CPI.)