Inflation – The Hidden Tax

Hidden, Tax?You are being secretly taxed. Did you know that?It is insatiable. It is not acknowledged. It is hidden.Hidden? Hidden tax?How so?Inflation. Global Inflation Crisis.Inflation has been termed the ‘hidden tax’.Why?Hidden Tax of InflationGovernments tax their people. Governments often desire more money than their taxes and tariffs are providing.How to satisfy this desire for more money? Governments can create currency.What is a potential and typical effect of currency creation?Inflation.If inflation does indeed result from government currency creation, it is because as governments satisfy the desire for more money by creating currency, the money supply grows out of balance causing currency’s purchasing power to lower.Government is able to profit from this inflation crisis by purchasing goods and services with the created currency, while the people are losing their purchasing power – reflected by rising prices.Due to this process of government-borne inflation crisis, it is said that governments can take purchasing power from the people through currency creation and inflation, and thus, this form of inflation has been known as the ‘hidden tax’.Suppose government inflates $10k worth of currency into $8k worth of purchasing power. Those who are not directly affiliated with government and the business transactions that involve the government’s created currency, lose $2k.In this way, government is able to transfer $2k from the people to itself, analogous to a tax, although this tax is indirect, subtle, often downplayed or disregarded by the mass media or government officials, and not often connected to the government as a type of wealth transfer – this tax is, in a sense, ‘hidden’.Stealing Right out of Your PocketLudwig Heinrich Edler von Mises (pron. Mee-sess) has been a prominent figure in the Austrian School of economics and in advancing free-market economics.Ludwig von Mises is the inspiration for the Ludwig von Mises Institute (US).Mises says about government theft through inflation:”Inflation and credit expansion, the preferred methods of present day government…make some people more prosperous, but only to the extent that they make others poorer…The advocates of public control cannot do without inflation.They need it in order to finance their policy of reckless spending and of lavishly subsidizing and bribing the voters…The most important thing to remember is that inflation is not an act of God, that inflation is not a catastrophe of the elements or a disease that comes like the plague. Inflation is a policy…”John Maynard Keynes, co-architect of the International Monetary Fund, socialist, and whose supply-side economics is quite opposite to Mises’s Austrian School, also shares a word on government theft through inflation:”By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”Whether a portion of the money is hacked by tax or the money itself is shrunk by inflation, the results are comparable – a wealth transfer, administered by government, proceeding to government, and landing ultimately in the banks of the bankers.A hidden tax. Milton Friedman, a free-market luminary, comments, “Inflation is the one form of taxation that can be imposed without legislation.”Inflation is a tax. Remember this when you see headlines covering another hundred billion-dollar bailout, infusion of cash, or loan.That money is yours.It is being stolen right out of your pocket.Right now.