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When the government spends, every dime has to be funded through taxation. The government is currently spending $7T a year, but only collecting about $3.5T a year in taxes. Does that mean we're getting $3.5T of government for free? Of course not. The US government is currently printing most of the difference, so instead of taxing you openly by taking money from your paycheck, they are taxing you in stealthly by taking purchasing power from your paycheck. Because raising taxes on the middle, working, and underclass is politically impossible, the government taxes them by inflating away the purchasing power of their wages, salaries, and savings. The government loves this type of tax- when government taxes you in a conventional way, you know who is taking your money. When they tax you through inflation, they can redirect the blame to speculators, greedy businessmen, OPEC, the Chinese, the labor unions, etc. Or even better, pretend like the inflation doesn't exist
There is no such thing as something for nothing. That is a law every bit as fundamental as gravity and thermodynamics
Last edited by Taggerung; 07-03-2021 at 03:27 AM..
When the government spends, every dime has to be funded through taxation. The government is currently spending $7T a year, but only collecting about $3.5T a year in taxes. Does that mean we're getting $3.5T of government for free? Of course not. The US government is currently printing most of the difference, so instead of taxing you openly by taking money from your paycheck, they are taxing you in stealthly by taking purchasing power from your paycheck. Because raising taxes on the middle, working, and underclass is politically impossible, the government taxes them by inflating away the purchasing power of their wages, salaries, and savings. The government loves this type of tax- when government taxes you in a conventional way, you know who is taking your money. When they tax you through inflation, they can redirect the blame to speculators, greedy businessmen, OPEC, the Chinese, the labor unions, etc. Or even better, pretend like the inflation doesn't exist
There is no such thing as something for nothing. That is a law every bit as fundamental as gravity and thermodynamics
Actually, inflation is not the "All Bad" thing that you portray it to be. It is certainly bad for SOME things such as savings or low interest paying bonds, but it is actually good for assets that appreciate such as real estate.
Also, inflation can be both good and bad for the government. It's good because it enables the government to pay off debt with cheaper dollars. It's bad because it raises the cost of interest on the borrowed money that the government owes. Since the US government now has such a huge amount of debt, I think that rising interest rates (which typically accompany inflation) will do more harm than good for the government.
Actually, inflation is not the "All Bad" thing that you portray it to be. It is certainly bad for SOME things such as savings or low interest paying bonds, but it is actually good for assets that appreciate such as real estate.
Also, inflation can be both good and bad for the government. It's good because it enables the government to pay off debt with cheaper dollars. It's bad because it raises the cost of interest on the borrowed money that the government owes. Since the US government now has such a huge amount of debt, I think that rising interest rates (which typically accompany inflation) will do more harm than good for the government.
Asset prices inflating to the point most people cannot afford is never a good thing.
It's good for those with lots of assets that appreciate.
If you asset really appreciates, you should not have to sell it. It should be generating income. You dont need to sell it. Such as owning commercial property. Its value only goes up if it can command more rent. If you are getting more rent. You are getting more money already.
If you asset really appreciates, you should not have to sell it. It should be generating income. You dont need to sell it. Such as owning commercial property. Its value only goes up if it can command more rent. If you are getting more rent. You are getting more money already.
Depends , not all areas work like that because of local laws and conditions ….
Here in nyc assets can soar but rent regulations may give you nothing as far as increased income .
Our apartments in Manhattan were golden but they produced no income to speak of .
They had to be sold to realize huge gains.
Today many commercial properties have horrible cash flow as tenants default left and right.
I prefer assets with no cash flow right now …I rather create my own dividends as needed off appreciation
Milton Friedman said that inflation was taxation without representation.
Milton Friedman also maintained that ~2% general price inflation was more or less mandatory for long term growth allowing for healthy levels of investment, price stability and so on.
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