That is the effect of our current financial system, where the use of debt to bid up the price of fixed assets has been labeled 'commerce' and 'investment'. The only effect of which has been the punishment of savers.

Bitcoin is that systems reckoning.

It also disincentivises investment, resulting in an economy less productive than it could be, and with built-in bias and stratifying wealth transfer, not unlike the system of bankers it seeks to replace.

That's assuming the return on investment is _always_ lower than the rate of deflation. Which is, nonsense.

The return on investment only needs to be lower some of the times for deflation to start hurting the economy

It's the basis of mainstream economics, and the reason for the 1-2% inflation target that most central banks use.

I know this, but this doesn't answer my question

Edit: do we know if economies really behave like this under these conditions? Are we really using a scientific approach on this? Or are we holding these models as divine truth?

It’s a bit like asking if the Church-Turing thesis is true or not, and if we’re really using a scientific approach to answering that question. On the one hand.. I’m writing this on a computer, dude! There is a pragmatic sense in which the Church-Turing thesis is “scientifically true” in the amount of progress that has been made in the domain of computer science which it invented, which does follow a scientific process. It allows us to make accurate predictions and test them. But it is embarrassing to say the thesis itself is just that, an axiomatic assumption. (There are some pretender proofs out there, but not consensus that they are correct.)

The relationship between productivity plus inflation (both measurable) and economic growth is similar. It’s the bedrock of modern macroeconomic theory, which has largely been successful in both explaining and predicting the effect macro policy has on economic growth. The history of North American and Western European economies after going off the gold standard, and asian and Eastern Europe economies more recently all show these same correlations. Outside of external influence, economies which stray outside of the ideal parameters end up either stagnating (lack of investment) or experience dramatic boom-bust cycles (excessive poor investments). I’m on mobile but there’s a fair number of reports by Fed and other central banks justifying their choice of interest rate based on historical examples, and with the purpose of achieving certain productivity (capital investment) and price inflation (money supply). You could also pick up just about any macroeconomics textbook and chase the footnotes and references or spend some time on Google scholar.

> The history of North American and Western European economies after going off the gold standard, and asian and Eastern Europe economies more recently all show these same correlations.

So what you're saying is that it's all based on one data point, the second world-war. Gold existed for thousands of years, why is this incredibly bizarre period of history used as a proof of anything about the gold-standard?

Even worse, the gold standard wouldn't have collapsed if it weren't for the widespread use of fractional reserves banking, along with many government policies at the time that significantly worsened the situation.

The 40's, 50's and 60's were a period of unprecedented growth for the US, which was on the gold standard during that whole period, but no one tries to claim that the gold standard was responsible for that.