NEW YORK (CNN/Money) - Federal Reserve Chairman Alan Greenspan and other Fed officials have bent over backwards lately to say they're all over this "deflation" thing and that the U.S. economy isn't much at risk of repeating Japan's mistakes of the 1990s.

But their constant reassurance is getting just a bit worrisome.

On Thursday night, Greenspan told the Economic Club of New York that the economy "is nowhere close to sliding into a pernicious deflation" -- which is when asset prices start falling, crimping personal wealth, corporate profits, and sending nasty ripples through the nation's economy.

In addition, minutes of the Fed's Nov. 6 policy meeting showed that the central bank's policy-makers were clearly thinking about deflation when it slashed its target for a key short-term interest rate, but characterized the risk of it as "remote."

A week later, Greenspan told Congress, "we are not close to a deflationary cliff."

A week after that, Fed Governor Ben Bernanke told the National Economists Club the likelihood of deflation was "extremely small."

Friday morning, St. Louis Fed President William Poole chimed in that deflation was "unlikely," that the Fed could handle it in the "unlikely" event it ever showed up and that all their recent talk about it was just part of an effort to be on the safe side.

OK, we get the point.

"The lady doth protest too much, methinks," said Northern Trust economist Paul Kasriel.

In "Hamlet," the line referred to how a woman's over-eager denials of wrongdoing betrayed her guilt. In the Fed's case, it refers to the suspicion that the Fed's constant trash-talking of deflation betrays the real worry underlying the central bankers' comments.

And they certainly should be worried, some economists think.

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For one thing, deflation already is a reality for many U.S. businesses. Prices for many things, including fuels, household goods, clothing, new and used vehicles, public transportation and communication -- or about 28 percent of all the stuff people spend money on -- actually fell in the year ended in November, according to data from the Labor Department, which compiles the government's main inflation gauge, the consumer price index (CPI).

More broadly, inflation barely has a pulse, according to two other measures:

• In the third-quarter, the gross domestic product (GDP) price deflator had grown just 0.8 percent since the third quarter of 2001, according to the Commerce Department, the lowest growth rate since the second quarter of 1950.
• And the price deflator for non-farm businesses in the Labor Department's productivity report grew a scant 0.1 percent between the third quarter of 2001 and the third quarter of 2002, again the lowest growth rate since the second quarter of 1950.

This falling inflation, or "disinflation," is too close to actual deflation for many economists, who look across the Pacific at Japan, which has been deviled by deflation for years, and see worrisome parallels between that country, with the world's No. 2 economy, and the U.S. economy, the world's largest.

Deflation, as Greenspan pointed out Thursday night, could be a nightmare for the U.S. economy, as it not only erodes the value of consumers' assets, but also in effect makes their debt payments more expensive -- and there are a lot of people in debt in the United States.

Debt payments become more costly because a dollar spent today is unavailable for tomorrow -- when things would be cheaper to buy. For example, in a deflationary environment, today's dollar would buy 10 apples, while tomorrow's dollar would buy 20.

Meanwhile, wages don't fall nearly as quickly as other things do, so companies will find themselves getting less revenue but squeezed by relatively high labor costs. That forces them to cut jobs, which reduces consumer demand, which further hurts the bottom line, which leads to more job cuts, and the ugly spiral continues.

"Deflation in the context of relatively strong economic growth is not a problem, but the concern is that growth is petering out, and there's not a lot of pricing power now," Kasriel said.

But most economists note that Japan in the '90s was very different from the United States is now. U.S. banks are in better shape, and America's fiscal and monetary policy has been much more aggressive in dealing with economic weakness. Indeed, the Fed has cut short-term rates 12 times since the start of 2001 in a bid to keep consumers spending.

"We're nowhere close to the Japanese example," said Fleet Boston Financial chief economist Wayne Ayers, a former Fed economist. "When you have real deflation as they have in Japan, consumers expect prices to be lower, and they defer purchases, which makes the spiral worse. That's not an apt description of what the American consumer has been doing."

Meanwhile, the Fed really does have some inflation-fighting ammunition. It can buy long-term Treasury bonds, driving long-term interest rates lower, a move that would be meant to ease the debt burden on consumers and encourage still more long-term borrowing.

And it has another effective tool, identified by Fed Governor Bernanke in November -- the printing press. Simply by printing money, or just threatening to print money, the Fed can lower the value of the dollar, which will in effect raise prices by reversing the deflationary effect -- while today's dollar buys 10 apples, tomorrow's will only buy five.

"Under a paper-money system, a determined government can always generate higher spending and hence positive inflation," Bernanke said.

So the Fed really could have a handle on this deflation thing -- which may be less of a threat now anyway, with the recent rise in oil prices and the drop in the value of the dollar. All the recent talk might simply have been the Fed trying to calm nervous investors, who have fretted for months about deflation.

"There are a lot of worries circulating around about deflation," said former Fed Governor Lyle Gramley, now a consulting economist with the Schwab Washington Research Group. "What the Fed is doing is saying we don't need to worry. If deflation happens, they will counter aggressively, and they have the tools to do so."