The deflation worry ...

If I were not a half-baked economist, I suppose I would not worry this much about the deflation threat. 
But, wait, even real economists are worrying about deflation. A lot! 
Paul Krugman has often written and blogged about this; in his latest post, Krugman notes:

Picture America in, oh, 2014: unemployment is still around 9 percent, prices are falling about 1 percent a year. Many economists might look at that situation and say, well, deflation is stable, not accelerating, so we must be at the natural rate of unemployment — move along, folks, nothing to see here.
So it’s time to start focusing on downward rigidity and what it implies. After all, all indications are that we’re going to be dealing with a depressed economy for a long time to come.

Why all the worry?  What is the situation on the ground, so to speak?

The latest U.S. data are sobering: Consumer prices overall have declined in each of the last three months, putting the inflation index in June just 1.1% above a year earlier. The core inflation rate — a better gauge of where prices are going because it excludes volatile energy and food items — has dropped to a 44-year low of 0.9%.

That's well below the 1.5%-to-2% year-over-year inflation that the Federal Reserve likes to see, and some Fed policymakers have raised concerns about the rising risk of a broad decline in prices.

The WSJ--yes, that darn pro-business publication:

The good news is that the Fed might not need to fear a Depression-style deflationary spiral. The bad news is that if the U.S. does fall into deflation, it could be stuck there for many years like Japan, and suffer the subpar growth that has gone with it. And because deflation is so poorly understood, policy makers could discover they have no good solutions.

How does this begin to show up? An example:

Safeway executives said the strength of that push on pricing caught them by surprise.
"Deflation continues in price per item and is not expected to significantly improve until the fourth quarter," said Chief Executive Steve Burd, who oversees supermarkets including Safeway, Vons and Dominick's.
Burd acknowledged that retail deflation was much greater than expected in the second quarter and drove a decline in identical-store sales.