I've made the point before that hyperinflation favors those in debt, and deflation benefits the lenders. Furthermore, I've stated that at the end of the day America is a democracy, but at the beginning of the day it is a plutocracy where political favors are lobbied by wealthy interests. Finally, I argue that hyperinflation versus deflation following a credit bubble is a function of monetary policy; deflation will happen with a hands-off approach, hyperinflation happens when money is printed and distributed without recourse.
Which all adds up to a safe feeling in my mind that the correction of the housing bubble, and all other bubbles blown of late, will be deflationary, and cash will increase in purchasing power and value as time passes. So long as the government can use tax money and treasury bonds to support inflated asset prices, it will continue to do so, but when that reaches its endpoint, the correction will be deflationary.
For every dollar of debt somebody owes, there is a quiet entity expecting to be paid back with interest, not to mention strong currency. Anyone who has treasury bonds or sizable holdings of bonds of any kind will have lobbying efforts intent on keeping the dollar strong. (Keep in mind, with a 10% fractional reserve policy, 90% of the money out there is debt.)
Now if politicians obliged themselves only to the voting public, it would be a different story. With most Americans having more debt than savings, they would benefit from strong inflation assuming incomes rose to match it. Employment was strong during the hyperinflation of the Wiemar Republic, although workers were paid with Monopoly money so their wages were really much less than in times of stable currency.
So hyperinflation had two benefits: it forgave debt, and unemployment was very low. Both of these are very democratic and enticing to anyone who can't find a job. Retirees who lived on fixed government pensions were left to starve, and anyone with cash holdings either moved it to assets or lost everything.
In Germany and Austria in the early 20's, the labor unions had particularly strong political status, and they favored free and easy money for reasons mentioned above. More so, we saw these countries strangled by war reparations. In this climate, we have a situation where hyperinflationary policies became politically possible. But given the general suffering and economic chaos that resulted, in hindsight it would still be inadvisable.
We are far from those conditions here. Hyperinflation is as easy as turning on the printing press. But politically, it is impossible.