Deflation sounds like in theory is a good thing for savers. In practice, its pernicious, harmful to everyone, and leads to a vicious cycle of economic contraction that can often take decades to get out of. See: Japan. This is a helpful primer: http://krugman.blogs.nytimes.com/2010/08/02/why-is-deflation...

Deflation might be caused in various ways; by a lack of economic activity or it might be caused by competition naturally lowering prices over time in a healthy market.

In Japan, the government so meddled in the economy that they caused the economic malaise; the same situation is currently occurring in the USA.

The difference should be obvious. Deflation is too loaded a term to be used without qualification or context.

In one sense, sure, the difference is obvious, but it seems to me that the negative consequences of deflation do not depend on how the deflation was caused. An excessive incentive to save will tend to curtail spending and investment no matter what, I'd think.

Savings represent capital, and naturally cause interest rates to decrease. Lower interest rates act as a signal that investors should go ahead and make investments. Saving represent deferred spending, not a persistence absence of spending.

However, in the government skewed markets of today where interest rates are forced artificially low these signals are not allowed to operate correctly and savers are penalized.

There is no "excessive incentive". People save when an incentive exists sure, but this represents future spending. At the moment there is little or no benefit to simple savings; why save when your money will be worth less over time? This is a result of not allowing interest rates to float with the market. Again, interest rates are manipulated by the government.

In the case where competition causes prices to decrease due to higher efficiency and quality, the money in your pocket becomes more valuable. What part of this is a negative consequence?

The difference is in fact that deflation is not always a negative result, which was my point in the first place.

I disagree, because I have actually experienced deflationary growth.

What it leads to is that workers are accepting discounted price for their work because of the deflationary growth expectation. That is how I work.