Assume you earn 4% interest in a savings account. Whether you pay a tax of 100% in a non-inflationary environment, or collect that interest tax-free with 4% inflation, the end result is the same. In other words, inflation is a tax that requires no approval from legislators. This concept isn’t lost on our government, which is currently mired in over $100 trillion of debt and unfunded obligations.
The bottom line: Legislators know it’s political suicide to impose such onerous taxes on their citizens, so they’ll continue to encourage the Fed to recklessly print money, thereby devaluing our currency and letting inflation do the dirty work for them.
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