Sure - it's a multi-part issue. Deflation is just as bad when wages are flat, though, or even worse. The real value of all this debt Americans have accrued would still be increasing while wages are flat. Deflation also means that businesses are less likely to increase wages - all their debt is in the same boat, and they can argue that by keeping pay the same in a deflationary environment that people are getting de facto pay raises.

Obviously wages being flat isn't good when there is inflation, either - if they don't keep up you end up needing more debt because you can't afford to pay for everything out of your regular wages.

We're barely scratching the surface here, but modern economies have a lot of different cogs that really only turn properly in an inflationary environment. It just needs to be a lot less inflationary than it has been.