Respectfully disagree. Now is indeed an awesome time to buy stuff, *if* you have money. Lots and lots of people are increasingly finding themselves without any, and nothing to do.
So the rest of us should go out and spend wastefully to prop up an overinflated economy? Or for what other reason? If my job is on the chopping block, you can be damn sure that I am going to curttail my spending. Well, I do that anyway as a matter of principle. I am not an economist, but my perception of the situation is that:
Inflation is bad, it makes your money worthless. Deflation is bad, because nobody has any money. There needs to be a certain balance in there, perhaps leaning slightly toward inflation. The problem, as I see it, is that in order to maintain this balance, people have to spend as much money as they have, which in turn widens the poverty gap.
In other words, you could never get insurance from geico (which they claim saves you money) because if wealth were evenly distributed, insurance would be expensive everywhere. (Ok, bad car analogy). My point is that these ginormous fortune 500 companies exist because *they* do the saving, and *we* do the spending.
I don't mean to defend AIG by any stretch. What they did was outright criminal. On an international scale. F*!# the Supreme Court, send them to the Hague. See how much other countries like being screwed over like that.
Not really sure how to sum up what I am thinking, other than "if nobody has any money, or everybody has lots of money, either situation is bad." And this, I believe, is the cause of the poverty gap. Deflation is merely adjustments for inflation, where the cash flow works the other way. The problem is, we do not get the money back as it deflates. However, when the deflation period ends, what we DO have is worth more.