If it's (hyper)inflation you spend it as soon as possible before it loses value until it collapses like the reichmark in 1920s germany or just recently the zimbabwean dollar. If it's stagflation you hoard it as money is increasing in value. What you're missing here is that somewhere, real value is produced. Imagine that there's 100$ total and there's 10 foobars, the only goods to trade so each is worth $10. Now there's a foobar maker, which produces another foobar - there's now 100$ and 11 foobars and the new market price is 9$. Who's earned value? The people sitting on a 10$ bill. Now imagine how well it works if everyone wants to sit on their 10$ bill.
So what's the solution? To print money, they print one more 10$ bill and suddenly there's 110$ total and 11 foobars and the money market works. Of course they can fall to the temptation and print more money than actual growth, say 110$ and 10 foobars, meaning you can sell a foobar for 11$.
If we keep making more foobars with the same amount of resources, then the price should come down over time. Eventually you should be able to take the $10 you earned and get two foobars instead of one. But by printing more money the government is taking all of the productivity gains for themselves.
And do we really need them to keep the financial system going? That is, do we need to keep the price of foobars at $10 to keep people from sitting on money? Absolutely not! If somebody out there is selling foobar-makers it always makes more sense to buy the foobar-maker than to sit on your money.
And what about people consuming foobars? They will always prefer to consume now rather than later. Would you rather have an ipod/house/car now or 10 years from now? You can keep the money supply constant, let prices fall, and the difference between the price of a car now, and the price 10 years from now is offset by the fact that you don't have to go without a car for 10 years.
And that's the policy that makes sense anyway. We shouldn't be forcing people to buy cars now OR to wait 10 years to buy a car. They should make those decisions like they make every other monetary decision, based on what provides them the most value.
Economists can certainly disappoint you. One said that the economy would turn up by the last quarter. Well, I'm down to mine and it hasn't. -- Robert Orben