>>75668
>Economic idiot here, conventional economists call deflation the devil, but what are the real reasons why it wouldn't be workable?
It would totally be workable, if it stayed within reason, but of course, a stable currency is preferable. Inflation is much worse than deflation, because it discourages saving, encourages malinvestment, and can lead to a crackup boom. It's also easier to check against deflation than against inflation.
>The argument is that money won't be spent if it grows in spending power over time but that seems to ignore that the average person wants to spend money on goods and services regardless.
Exactly this. People won't sit on their money for all eternity, waiting for its purchasing power to pierce the heavens. After a certain point, their hungry stomach, boredom, or love of travel gets the better of them and they spend the money. Economically, you can say that the marginal utility of additional purchasing power for your money stock drops below the marginal utility of a consumer good, so you buy it.
The Keynesians don't get any of that, but they are hardly innovative. In the middle of the 19th century, Frédéric Bastiat already had to argue against economists and politicians that wanted to stimulate demand by God knows what means, ignorant of the basic fact that if you force people to spend their money, that money must come from somewhere. The classic example is when you break a shopowners window. Then the shopowner has to get a new one, and that means his money goes to the glass manufacturer, who buys bread, and so on and so on. The problem, of course, is that if you hadn't broken the window, the baker would've bought the bread himself and still be richer by one window. So you diverted resources, you didn't create them.
>The core of the idea would affect investment but couldn't lenders just set up negative interest rates such that the borrower never pays more than the original amount of the loan, which would eliminate usury, and the payback for the risk of lending is to split the profit of the investment?
They could, sure, but then you'll still have interest, unless the interest rate is so negative that it cancels out the increase in purchasing power over time. Say, the money's purchasing power increases by 5% each year, then the lender might demand an annual negative interest rate of 4%. Going as low as the 5% or lower would make the loan essentially a gift.
Splitting the profit of investment is just another means to take care of the time-preference of the lender. He will want more money back than he put in, and he wants to take care of the risk of his loan, but whether he does that by getting a share in the profit or by getting interest is simply up to his preference.
I hope that was somewhat helpful.