Subject: Re: Buffett - zero inflation target
It’s absolutely true that deflation can be more theoretically dangerous than inflation — the classic spiral where prices fall, consumers delay purchases, businesses cut prices further, layoffs follow, and the cycle feeds on itself.

But that’s largely a pre-modern problem.

In the real, post-Depression world — with central banks, fiat currency, and instant digital money movement — we now have roughly 80 years of evidence showing that struggling economies don’t stay stuck in deflation. They reflate, and they do it fast.

Why? Because the playbook is simple and politically irresistible:
Put money directly into consumers’ hands.

Voters reward it. Policymakers know it. And when push comes to shove, it happens — every time.

The pandemic was the ultimate stress test:
We literally shut down large parts of the economy, told people not to work, and created what should have been a DEEPLY deflationary environment.

Instead?
Massive STIMULUS + central bank action → rapid reflation → inflation surged to ~9%.

That’s the modern REALITY. Look at the past 80 years.

So yes, deflation is VERY dangerous — but it’s also highly containable in today’s system.

Inflation, on the other hand, is what we repeatedly struggle to control once it takes hold — and it disproportionately harms the working and middle class.

That’s the core of Warren Buffett’s point:
The goal should be stable purchasing power — not targeting a built-in erosion like 2% inflation.

Aim for 0%.
Accept that you will land slightly above it.

But don’t institutionalize inflation and then act surprised when it drifts to 3–4%.

Because in the modern world, the bigger long-term risk isn’t deflation.

It’s the quiet erosion of buying power.

And before someone brings up Japan—

Yes, Japan experienced prolonged low inflation/deflation. But it’s an outlier driven by unique structural factors: demographics (aging/shrinking population), cultural savings behavior, and policy choices that no major Western economy has chosen to replicate.

More importantly, Japan’s experience actually reinforces the modern point:
Even there, policymakers spent decades trying to create inflation through aggressive monetary and fiscal policy.

No one looked at Japan and said, “This is the model.”

They looked at it and said, “Avoid this—and if it happens, reflate.”

That’s exactly the playbook we’ve seen globally for decades.