[adanthar]

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So deflation is bad for those in debt. It also must be conversely good in the same sense sense for those who are debt-free and holding money. Is debt a thing to be encouraged? Generally speaking I would think probably not. Rather, savings and investment are the basis of future prosperity, so if anything should be encouraged I would think that those things should be encouraged rather than debt.

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You'd certainly get your wish in a deflationary economy, because one of the first and surest outcomes of a prolonged period of deflation is that the entire lending cycle would completely collapse. Forget the wave of both personal and business bankruptcies crashing into everyone above the consumer on the food chain and let's just focus on the basic economics. If the future value of money becomes *greater* than the present value of money, why would you ever make a loan - especially at a low interest rate - when you could hang onto the cash instead? Even if you were willing to make that loan, what kind of sucker would it take to accept it?

The real issue with your statement is that

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Is debt a thing to be encouraged? Generally speaking I would think probably not.

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this simply isn't true. Properly leveraged debt in an economy with free lending is an asset, not a liability, and results in far greater economic growth than the same amount of money sitting in a mattress. Further, what do you think 'investment' means, other than some individuals lending money to others in exchange for some kind of asset? And why would you assume that a deflationary economy would encourage investment?