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When governments engage in deficit spending to provide benefits or fund programs, the cost is not free. It is paid for by devaluing the currency through inflation, which erodes the purchasing power and savings of every citizen.
The process of running government deficits, which requires money printing, functions as a hidden tax on the populace via inflation. This devalued currency is then funneled primarily to those who own financial assets, systematically increasing wealth inequality.
When inflation outpaces interest rates, it's not a market accident but a calculated government policy. This gap functions as an invisible tax that steals purchasing power from anyone holding cash. This wealth transfer from the populace to the government occurs without legislation, tax forms, or public consent.
When governments print money to cover deficits, they devalue currency, effectively imposing a hidden tax on citizens. The only protection is owning assets like stocks, real estate, or businesses whose value rises with inflation. Since 90% of Americans lack significant assets, they are most exposed to this wealth erosion.
Deficit spending acts as a hidden tax via inflation. This tax disproportionately harms those without assets while benefiting the small percentage of the population owning assets like stocks and real estate. Therefore, supporting deficit spending is an active choice to make the rich richer and the poor poorer.
When governments print money to cover debt, they don't take dollars from accounts but reduce what those dollars can buy. This "theft of purchasing power" is an invisible tax that citizens feel but often misunderstand, misdirecting their anger.
To fund deficits, the government prints money, causing inflation that devalues cash and wages. This acts as a hidden tax on the poor and middle class. Meanwhile, the wealthy, who own assets like stocks and real estate that appreciate with inflation, are protected and see their wealth grow, widening the economic divide.
The debate over reallocating deficit spending from war to social programs is a red herring. The economic damage comes from spending unearned money, which creates inflation. The specific allocation—be it for bridges or bombs—doesn't change the fundamental inflationary consequence of the deficit itself.
The inherent complexity of economics serves as a shield, preventing the public from understanding that government debt and money printing directly devalue their savings. This functions as a hidden, non-legislated tax on anyone holding the currency.
Public anger is misdirected at the wealthy. The true root of unaffordability is politicians and central banks running massive deficits and printing money to cover them. This devalues currency, functioning as a hidden tax on the poor and middle class while benefiting asset holders, thus fueling inequality and rage.
The focus on "the wealthy not paying their fair share" distracts from the primary mechanism eroding middle-class wealth: government deficit spending. This necessitates money printing, which devalues the savings of ordinary people and drives up asset prices, benefiting asset owners at the expense of savers.