All the sibling comments snarkily asking why you don’t invest your money is mind blowing to me. Are we all so conditioned that we can’t see the insanity behind being forced to invest the results of your labor or you’re poor? It is a tax on living that does not need to exist, and the end result is it disproportionately benefits the capital class.
Incredible how the elites have conditioned us to encourage systems that impoverish us.
The way I have heard it explained is that a general low level inflation is more aimed at the rich than the poor. In that, if you look at the total money supply, most of it is in the hands of the rich, almost by definition.
So, if you have no inflation, or even deflation, then the rich just sit on their gold like dragons. It stays with them and doesn't circulate. The only change is really for gambling debts and having kids. It's not actually useful as a method of exchanging goods and services.
But if you inflate away the dragon's gold, then these rich asshats are pretty much forced to find ways to beat that inflation, just to stay stable. So, they go out and invest the money in gold mines and dunny roll companies. The rich then find out that they can actually make their gold piles larger than the inflation rate, sometimes.
That investment ends up being good for the poor as the rich have to give them jobs and these jobs pay wages and then you get the consumer economy of Henry Ford paying workers enough to buy the cars they are making (likely apocryphal). So, money then is flowing and not just sitting there. Which is kinda the point of money in the first place.
In general, inflation is about the rich. It just so happens that a side effect of inflation happens to mostly be good for the poor too. A very very rare win-win situation.
Your whole comment shows the goal is to maintain the socioeconomic order of those with assets (regardless of how they were obtained) maintaining greater purchasing power over those with fewer assets, even though simply hoarding assets provides zero utility to society, whereas having fewer assets but actually working provides utility to society.
A simple power law land value tax would limit the dragon from hoarding gold and incentivize working rather than hoarding. Instead, we have the exact opposite. We tax working via earned income taxes, and have lower capital gains tax rates. And we bail out asset owners time and time again, but when wages don’t keep up, it’s crickets.
In a way, it is also a way for old people to maintain their power, after their physical power declines. Things are hunky dory as long as economic growth is achieved, but if population dynamics are changing, then we’re in for some drama. The battle lines are not just rich v poor, but old v young, especially in democracies.
See the most recent proposal to court votes by removing income tax from social security income.
Yeah, I entirely agree that it's a system set up for the benefit of the rich.
Historically speaking, that's pretty much all we have ever had.
I do want to echo the difference though. In the 'old system' of hoarding dragons, the money was useless. In this 'new' inflation system, the money is being sent out into the economy to invest in things. See the ZIRP of the 2010s. The money is working, not the dragons, but at least that is something.
As for the elderly, the maximum outflows of social security in the US will be in ~2030. So expect a lot of chatter leading up to that year and then for it to die down (literally).
>As for the elderly, the maximum outflows of social security in the US will be in ~2030. So expect a lot of chatter leading up to that year and then for it to die down (literally).
The ratio of inflow to outflow is important, not the outflow. Also, Medicare/Medicaid get lumped in with Social Security for the purposes of discussion wealth transfer from workers to non workers, and I don’t see the ratio of inflow to outflow increasing anytime soon.
Incredible how the elites have conditioned us to encourage systems that impoverish us.