Will Deflation Make You Naked, Homeless and Hungry?

Economic orthodoxy says deflation can leave us naked, homeless and hungry. Not everyone is convinced.

A model of deflation?

Photographer: Vincenzo Pinto/AFP via Getty Images

Steve Stanek is typical of the readers who've peppered my inbox in recent weeks on the topic of deflation. "I cannot understand why deflation is viewed as worse than inflation," writes the 59-year old corporate communications consultant, who lives in Illinois. "Inflation rewards borrowers and punishes savers and people on fixed incomes. Deflation rewards savers and people on fixed incomes and punishes borrowers. I'm tired of being on the losing team because I've been frugal, instead of a borrowing spendthrift."

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