a) When I can earn Bitcoins I will be more likely to spend them. Dollars as inflationary but I’m not likely to spend the last dollar in my pocket on something I don’t actually need. Bitcoins are inflationary but I’m not likely to spend my last Bitcoin on something I don’t really need. It’s currently very hard to earn a significant amount of Bitcoins so no one is ready to spend them and at the same time there aren’t many places to spend them either. So while the deflation is good we need to be able to replace every Bitcoin we spent to make it spendable like a currency. When I can spend X amount a week based on an income of Y amount a week then why not spend Bitcoins in that scenario? I don’t lose any Bitcoins so there is no reason not to spend my profits. I’m not however going to spend my savings and who exactly would?
b) Volatility isn’t a problem. Bitspend and Bitpay can handle it. Better designed payment processors can handle it. Better designed exchanges can handle it. But for now volatility means increased profits for speculators and right now speculation is one of the only ways to turn 1 BTC into 2 BTC. So if that is the best source of income in the Bitcoin economy it’s going to create a natural incentive to pump and dump which drives volatility up.
c) Bitcoin does not have to replace the dollar to be a success it merely has to coexist. Alternative cryptocurrencies don’t have to replace Bitcoin but merely compete. Bitcoin is like the first web browser when no one knows how the web works but experts from other fields expect it to work like something else. Bitcoin is unique and we cannot base how it works around fiat currency, gold or anything else.
Saving and investment are the solution to debt. Bitcoin encourages both saving and investing. Investing isn’t the same as mere spending because you earn profits on investing. The majority of people in the USA are in debt because of inflation, credit, loans, etc.