Deflation mostly matters with currency. Deflation of products is a good thing.
The problem with deflating currency is that it encourages you to sit on it. Economists don't want you sitting on a hoard like a dragon. In the extreme case, GDP goes to zero today because everybody is expecting prices to be cheaper tomorrow. Then all the workers get fired because there's nothing to produce. Now they have no money, and buy nothing, so it gets even worse.
Obviously the extreme case doesn't happen, but the thought experiment illustrates the problem. A tiny bit of inflation encourages purchasing and investment, which keeps money moving. You may want to stop working as an individual once you've acquired enough money, but the nation as a whole never retires, and relies on consumption to give everybody work.
Prices of goods coming down is OK, because goods are consumed. You have to buy new goods tomorrow. Durable goods wear out; real estate is maintained; intellectual goods get boring. The economy rolls along, and people continue to make investments to get a bigger share of it for themselves.
So economists aim for low but steady inflation. It benefits the economy as a whole, at a cost to those who want to accumulate cash and not spend or invest it.
tl,dr: Sitting on cash removes it from the economy, and deflation encourages people to spend money tomorrow rather than today.
In reality, people spend their money when they want or need something.
Today it's possible to hoard wealth in real estate/gold/stocks. The value of the pile is guaranteed to go up because of guaranteed inflation. Yet for some reason the economy doesn't grind to halt. By your explanation, everyone would just sit on that pile like a dragon and never buy anything.
Economists are perfectly happy with you buying stocks or real estate. That puts the money back in circulation, and funding something people use. They just don't want you sitting on cash.
The argument was that people wouldn't be consuming if their wealth keeps growing and everything gets cheaper all the time, and the economy would grind to a halt. It's the same thing with investments, and it isn't true. People can buy gold right now and sit on it until they die (in a few days), but they don't.
People spend whenever they need or want something, which is the fundamental force that keeps the economy running, regardless of what type of money or wealth they possess.
"Sitting on cash removes it from the economy, and deflation encourages people to spend money tomorrow rather than today. "
Since most people are in debt, this really says: encourage people to borrow to buy what they cannot afford today and then hope for inflation to make that borrowing less onerous.
Economists like debt. It gets the economy moving. A debt-less economy is very slow. Most non-trivial projects require debt: starting a business, buying a house, getting an education. If you had to pay for those in cash, you'd do so much later if ever.
It's the reason most corporations have debt. They use it to fund expansion. As long as that expansion brings in more money than the interest payments, they literally never have to pay that debt back.
Human beings, unlike corporations, retire. Inflation certainly puts a crimp in that, but there are many other problems with retirement with larger effects. Ultimately, those problems come down to an economy that continues to expand even after they've left the workforce, such that they can outpace inflation by either their own investments, or the government's.
Which, as I started with, is all about somebody taking out debts so that the economy expands. A vastly slower economy without debts is more straightforward to understand, but it's also a much more primitive and less productive one, and so everyone is worse off.
The problem with deflating currency is that it encourages you to sit on it. Economists don't want you sitting on a hoard like a dragon. In the extreme case, GDP goes to zero today because everybody is expecting prices to be cheaper tomorrow. Then all the workers get fired because there's nothing to produce. Now they have no money, and buy nothing, so it gets even worse.
Obviously the extreme case doesn't happen, but the thought experiment illustrates the problem. A tiny bit of inflation encourages purchasing and investment, which keeps money moving. You may want to stop working as an individual once you've acquired enough money, but the nation as a whole never retires, and relies on consumption to give everybody work.
Prices of goods coming down is OK, because goods are consumed. You have to buy new goods tomorrow. Durable goods wear out; real estate is maintained; intellectual goods get boring. The economy rolls along, and people continue to make investments to get a bigger share of it for themselves.
So economists aim for low but steady inflation. It benefits the economy as a whole, at a cost to those who want to accumulate cash and not spend or invest it.
tl,dr: Sitting on cash removes it from the economy, and deflation encourages people to spend money tomorrow rather than today.