Here's the big secret about inflation.
Inflation taxes rich people, and rewards people who are in debt.
People who are in debt, benefit from inflation because they are able to pay off their debts in "Cheaper" dollars. Unfortunately, when people see that the price of lettuce is 10 cents higher than when they looked last, they think they're being hurt, but over the long haul, they actually benefit because the price of their house goes up giving them a larger percentage of the equity in it, and their car payment goes down effectively because they are working less hours to make each payment.
On the other hand, people that hold large stores of cash get hurt, because their cash is worth less.
I've often thought that a plan to repay the national debt by inflating the money supply, or basically printing the money to repay the debt, would serve the public by eliminating the enormous amount of interest that's being paid on the debt, and the burden would be placed on the people who actually have the money, instead of the people that are living from paycheck to paycheck.
Inflation is a tax on the rich
(C) 2000 by Chuck Luciano
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