How does Inflation Hurt the Poor and Middle Class?
Let’s consider how inflation works on your savings. If the total amount of money in existence is increased by 5% in one year, then all money is devalued by 5% that year. Barring all other variable prices will eventually rise by 5%. This is no different in principle, than having 5% of your money taken out of your savings account.
Doubt that we have inflation? Consider this: today’s dollar is worth about 5 cents compared to 100 years ago. What does this mean? It means that if you were born 100 years ago and your parents put a dollar in a safe for you, today you would have lost 95% of it’s value. Our government is continuing as routine a policy of inflation.
We’ve all heard that some inflation is good for the economy (it’s not, but we’ll leave this argument for another day), but is it good for the poor and middle class? Certainly it is not. Inflation eats away at the savings and security of those who cannot protect themselves against it.
Said another way
1st -- The 5% does not account for the cost of "justifying it" the "bills" the "voting" the "debating" need to be thrown in.
2nd -- When the 5% (plus above) is spent those monies will likely NOT go into consumer-driven entrepreneurialism -- instead they will almost entirely go into subsdizing systems-industries-banks that the market wants to die; thus destroying what is wanted.
3rd -- It destroys the dollar which destroys purchasing power creating the impetus for more deficit spending.
I would guess that the cost of 5% Fiat Spending/Credit would be 80 cents on the dollar.
Every $1 Gov't spends there is 80 cents of waste or lost opportunity.
Octobox
*&^ Constitution --- Constitutional Rationality
The government is certainly wasteful
I would definitely agree.
Ron Paul 2012
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