Deflation is bad when you need a society to spend spend spend so you, the government, can collect all that tax money to put to whatever use you want. If deflation causes your citizens to spend less, you garner less tax money, and having less money to play with is bad; how would you pay for all those tanks, then? So maybe you pay a guy here and a guy over there to propagandize the dangers of a deflationary currency and why a currency which is better spent right right now (unless you want to feel the effects of inflation) is the only way we can continue our way of life, for if we lived with a deflationary currency (such as the gold-backed dollar), businesses would collapse, chaos would ensue, rioters would flood the streets and the terrorists would win etc. etc. (except this never happened with the gold-backed dollar.)
Deflationary currencies mean more money to the individual; you're not only more likely to conserve your cash, but you're rewarded for conserving by having more money to play with as time goes on, so you can spend your cash on even bigger things, like starting a business of your own. There's more incentive to properly manage your funds and spend only when it's wise to do so. The idea that people would rather starve than spend their deflationary money is absurd; and in either case, whether the money is inflationary or deflationary, it is worthless if it is never spent, so the idea that the economy would fail is also absurd, for the very point of money is a middle-man between the point that you do work and the point where you buy something, and nobody wants to live in rags just to say they're a millionaire.
There's also the (massive) bonus of governments being unable to tax through inflation. Just a thought.
Let's consider the hypothetical negative effect of deflation: the deflationary spiral.
A deflationary spiral is a situation where decreases in price lead to lower production, which in turn leads to lower wages and demand, which leads to further decreases in price.
First, we must assume that, in the example of gasoline, when gas is lowered from $3.50 to $0.35 over several years, the businesses which put the gas on the market are selling at a loss. Unless we're also assuming that businesses are stupid, we can safely assume that, if gasoline is priced at $0.35, the businesses surrounding gasoline are still making hefty profits; because the currency is worth much more now than it was in the past, $0.35 would be a good amount of cash, more than enough to operate a business, and in the case of gasoline, we simply cannot get enough of the stuff, which means it's still being produced, brings me to the next point: supposedly, this causes lower wages and demand. Now, since people have more money in their pocket, and people still really want to go places, they're still dropping tons of cash into purchasing gasoline. This means the businesses surrounding gasoline are not only taking in all that cash, but the cash they do have is also deflating, resulting in yet more cash for the individual. Although a person may be paid $4 an hour one year, but several years later may make $3 an hour, remember, the money is deflating, and thus, $3 of today could've been closer to $5 those years ago; in any case, if the business is improving, they have more opportunities to pay more people higher wages, or if the business isn't doing so well, the opposite will happen; whether the currency is inflationary or deflationary can't fix bad business.
So as we can see, a deflationary currency would cause lower prices, but would not cause lower production--it may even increase production, as the individual will have more money over time to spend on what they love--this would, in turn, possibly lead to even higher (comparatively) wages, and with higher wages, e.g. more money to spend, you could see more businesses sprouting, with a money that won't deteriorate over time, and the cycle continues.
We clearly see a conflict of interest here: with a deflationary currency, especially one largely out of the control of government hands, wealth and power flow toward the individual; with an inflationary currency, especially one in control of government hands, wealth and power flow toward the government (and this is especially clear, as I pointed out above, when government inflates as a hidden tax.) At that point, it's all up to you; if you like big government, a tightly controlled inflationary currency is perfect, and if you prefer small/no government, a money like Bitcoin is perfect.
