Britian Goes Japan?
I have been on the deflation side of the debate and there are things that concern me towards inflation, I am still in the deflation camp.
Well, it seems that in Britain there is research suggesting they are heading into deflation. To be fair, Britain is far weaker of country. I went over there to teach and they've so slaughtered their educations system, well, they can't keep teachers. It was so awful, why would anyone want to stay in the profession? They've been paying the tab for university for teachers for years now and they still can't keep teachers.
Anyway, my time living abroad enabled me to actually see the living conditions and the economy there first hand and that was awful. Lifestyles have been declining for more then a generation now. I'd never seen so many 30 something year olds still living with mom and dad and highly limited job prospects. The only ones really "getting ahead" were those who had managed to buy a home and they were renting the rooms in their home out to others.
I kept looking for what was the foundation of the economy and I didn't find anything. They developed an attitude that it is cheaper to import long ago. Talking with a young person, somewhere he was taught what's the use of producing goods when they can be imported for less, yet the question becomes, "what exactly do you produce?"
They have pushed the limits in terms of what people can do when the going gets rough. They already have an large sector of their population renting rooms to subsidize income. They already have adult children not leaving home, working at very low paying jobs, and contributing to the household. They have already increased spending on social programs beyond sustainable levels with interesting consequences. A teenage girl's best prospects in life is to get pregnant and live on social services and they their teenage pregnancy rate is enormous, the highest of all "modern" economies. They already have high taxation and taxation and paying for services that you'd never expect, like the TV tax. Seriously you have a TV you have to pay a tax to watch TV.
They've passed society's ability to absorb any more costs. I lived in a shared house with 5 bedrooms, hence, 5 adults. These about age 30 adults were paying 25-40% of their income for rent in shared accommodations before utilities. One had a master's degree in engineering.
They inflated costs, but not income...