[lovvtide]

As technological advancement drives increased productivity, purchasing power that would have otherwise accrued to the not-asset-owning class in the form of price deflation is siphoned off by central planners who would like a way to levy taxes without having to go through the democratic process.

The justification/counter-argument from academia is that if deflation were allowed to occur it would harm the economy by disincentivizing the circulation of money (since all you have to do to is wait and your currency becomes more valuable).

The counter-counter argument is that it is nonsensical to expect that a falling cost of living would harm the economy because price deflation is, on the contrary, an effect of economic growth that has already occurred.

[gottorf]

I always thought that the argument against the gold standard/BTC/whatever (relatively) stationary or deflationary currency is that the money supply needs to be elastic to account for the change in the size of the economy. That is, as the economy grows, there needs to be more currency to support it.

No arguments against the idea that inflation is effectively a tax.

[lovvtide]

My understanding is that everyone agrees that expanding the money supply under conditions of economic growth is necessary to avoid deflation.

The contention centers on whether price deflation is a good or bad thing.

If you're a "grow the pie" kind of person, you probably think that it's a good thing because falling prices without falling demand is simply a sign of the pie having grown.

If you're a "redistribute the pie" kind of person, you understand that deflation is an opportunity to control where newly created wealth is funneled to without the people who create the wealth noticing.