I don't see how a deflationary currency is a problem.
As far as I can tell, the only ones who benefit from the "money has to be in constant circulation" adage, is those who gain a profit off every transaction made. Money is meant to be a representative token to make trading easier; I fail to see how it makes any sense to "encourage spending" in itself.
A really big factor is that people get upset when the number describing their wages goes down.
Businesses are also disinclined to lower their prices (this isn't a rule, sure businesses lower prices, it's a description of long term aggregate behavior).
Both of those things are things that must happen for an economy to function with a deflationary currency.
> A really big factor is that people get upset when the number describing their wages goes down.
I doubt whether that is still the case in a (hypothetical) economy that is largely deflationary. In the current context, sure - but to me that seems largely a result of people being used to inflation, and I doubt that that association lasts if inflation is no longer the standard situation.
> Businesses are also disinclined to lower their prices (this isn't a rule, sure businesses lower prices, it's a description of long term aggregate behavior).
As far as I can tell, the only ones who benefit from the "money has to be in constant circulation" adage, is those who gain a profit off every transaction made. Money is meant to be a representative token to make trading easier; I fail to see how it makes any sense to "encourage spending" in itself.