http://money.cnn.com/2009/02/19/news/economy/deflation/index.htm

The standard response to a severe recession/depression is deflation. And deflation is great for people who have cash in the bank or a secure salary, pensioners, welfare recipients and everyone on a fixed income. At least, it's great for a while.

But if your assets are in stock or property, their value rises and falls with the value of the dollar. You don't care about the value of currency, you want GROWTH. What really matters is that the credit you need to create more profit can be paid back at today's interest rates in tomorrow's inflated dollars. A controlled and gradual inflation is good for business, after all, isn't that how Mr Reagan planned to pay for Star Wars and a 600 ship Navy? It's a way of borrowing on future prosperity, or to put it another way, owning your own mint. The last thing the financial world wants is runaway deflation, as the linked article makes very clear. In fact, I think they're willing to risk Weimar-style inflation in order to prevent it.

Perhap's Mr Obama's massive stimulus spending isn't just a last-gasp desperation move to kick start the economy back into life. Maybe it's a deliberate anti-deflationary policy. After all, it started during the Bush administration, with the Lehman bailout and the October surprise and TARP. Of course, the conservatives in Congress and the press fought it tooth and nail...or did they? They huffed and they puffed but really did nothing to stop it. And mayby they got just what they wanted, plus someone to blame if it doesn't work.

The historians of the future are going to love our century.