Inflation as a threat to the US Economy
It may sound strange given that a lot of people are talking about deflation but the biggest threat facing the US economy might well be inflation. It can be very tempting during tough economic times for the government to try to solve the problem by increasing the money supply. Certainly there are short term benefits to doing this. However inevitably it will lead to much more serious problems down the road. Having too much money in the system will almost certainly lead to inflation.
The main reason that inflation is a threat to the US economy is that it erodes the country's purchasing power. Basically you have to spend more money to get the same amount. To a certain extent a little bit of inflation is the sign of a strong economy. The problem is that when inflation is too high it will be a huge issue for the economy, once inflation gets going it can be hard to stop, just look at Zimbabwe or Weimar Germany if you need examples. For the average person inflation is a problem because their money won't buy as much. However from a macroeconomic viewpoint it also discourages investment and devalues the dollar. This tends to make the inflation even worse and you end up trapped in a vicious circle.
The problem of a devalued dollar is that it makes it more expensive to import products from other countries. This is a serious problem for a country that runs massive trade deficits like the US. The far bigger problem however is that inflation will discourage foreign investment. There is no point in investing in the US if you lose money when you have to convert your profits back to the currency of your home country. The lack of investment slows business growth which slows the economy. This of course keeps the value of the dollar low which causes the inflation to get worse.
The reason that inflation occurs is that there is too much money available. In a lot of cases inflation can be caused by short sighted decisions made by the politicians. There are some benefits to inflation in the short term, the lower value of the currency makes paying off your debts cheaper for example. This is why it can be tempting for the politicians to increase the money supply when the economy is struggling. In the short term the increased money supply will help stimulate the economy and then once the inflation kicks in they can pay their debts off at a lower cost. Unfortunately the benefits are short lived. History has taught us that doing things that cause inflation to get out of a financial crises will almost certainly lead to bigger problems down the road. Unfortunately most politicians take a very short term view so there is a good chance that inflation will be the worst threat to the US economy.