Inflation is a tax that doesn’t require legislative approval. Here’s why: Assume your saving account earns 3% interest. (I know; but play along.) Whether that interest is taxed at 100% in a zero-inflationary environment, or earned tax-free with 3% inflation, the end result is identical. Considering the US is mired in over $100 trillion of debt and unfunded obligations, that’s especially convenient.
The bottom line: Legislators know that imposing onerous taxes on the public is political suicide — so they’ll keep encouraging the Fed to print money, thereby devaluing our currency and letting inflation do the dirty work for them.
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