When an economy is not performing well, the government may try to stimulate it by printing more money. This increases the money supply, which in turn, leads to inflation.
If you’ve not been paying attention, here’s a stat to bring things into perspective, “Over the last two years, the US Federal Reserve has printed 80% of all US dollars in existence.”, The inflation brought on by this devaluation of the U.S Dollar makes it harder for people to buy the goods and services they need, contributing to an overall slowdown of the economy.
If you haven’t already, be sure to read this piece on why Taxation is Systemic Theft:
Inflation is an Insidious Form of Taxation
Inflation is among the most insidious and regressive taxes because it hits the poor and middle class the hardest. Inflation erodes the value of money over time, meaning that what you can buy with your money today will be worth less tomorrow. This means that those with less money are disproportionately affected by inflation, as they can’t afford to buy the same things they did yesterday. Those with greater wealth are still impacted, just less so, but in an equally unacceptable manner.
Inflation also has a long-term effect on the economy.
Inflation reduces savings since the value of money decreases over time, making it difficult for people to save for retirement or purchase big-ticket items like homes or cars. It also incentivizes people to take on debt to purchase goods since the cost of those goods will increase over time. This can lead to an unsustainable debt cycle in which people cannot pay off their debts.
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