Only if government is fiscally irresponsible would deflation be bad. If they operated responsible, deflation would mean they could offer more services with the same tax rates as last year.

For banks, they would have less income from lending, but realize that overal economic growth would be muc higher giving banks more money to lend out and more customers in a position of being able to borrow for economic growth because the economy would be more stable.

Prior to the founding of the federalvreserve, it took wars to underne the economy. Now we have a boom and bust cycle that benefits government and their insiders, buturts the economy.