The best part of rising inflation is that when you get the wages to make more to deal with the rising cost of living, it's all at your top marginal rate so you get a tax increase and nowhere enough new money to live. It's great!
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You're better off than if your wages didn't rise, but not better off than if they hadn't set off an inflation fire.
It's basically a hidden tax increase for everyone at the same time a lot of critical things are going up a lot faster than the headline inflation rate.
It's basically a hidden tax increase for everyone at the same time a lot of critical things are going up a lot faster than the headline inflation rate.
Yes, and have an impartial third party determine inflation. Having the government declare inflation is like having a kid mark his own report card.
On paper central banks are independent, but in reality they aren't. That's why they keep making political choices instead of good choices.
Governments want power particularly to do flashy things and say they give stuff to someone (especially their corporate sponsors) and this means being able to wield more of the economy to their own ends. This generally means being able to spend more money either without taking consequences for the inflation it creates because that would drive up price of living increases which are boring or without paying the real debt costs for what they've done. In a number of ways inflation allows politicians to spend more economic output over time without appearing to tax any more.
To this end, being able to spend more money through an invisible inflation tax on all income and savings and chip away at sovereign debts, they want to be able to create inflation without reporting that they're doing so. This has a number of benefits. Increasing debt does temporarily increase real economic output because it can bring future investments forward. Unreported inflation has an added benefit of appearing to grow real GDP whether there is growth or not since prices rise which is politically beneficial.
Central bankers ultimately work for the state which we get to see in many ways, so they've helped to increase unreported inflation by fudging the numbers, they've increased general indebtedness by artificially raising prices and lowering borrowing costs, and they help keep governments afloat by letting them to gather more taxes and inflate way their debts without appearing to inflate away their debts. Workers fall behind while the government gets to pretend they're doing so well.
The wage/price spiral is a wonderful bit of propaganda that blames the working and middle class for the effects of too much money in the system caused by the government and banks. Wages are just another price, workers getting fairly paid in terms of purchasing power isn't the cause inflation -- if they succeed and that looks like constantly rising wages despite stagnating purchasing power, then that's the nature of the broken system driving up all prices, not the nature of getting raises.
The ultimate effect of all this is to take power away from the masses and bring it together in the hands of the richest most powerful people on earth in ways that don't piss people off since you can raise their wages every single year and still be implementing across the board pay cuts every year, implement tax increases every year and benefit reductions every year while claiming you're doing the opposite, and slowly drive the working and middle classes into debt slavery without ever directly forcing them to do anything.
To this end, being able to spend more money through an invisible inflation tax on all income and savings and chip away at sovereign debts, they want to be able to create inflation without reporting that they're doing so. This has a number of benefits. Increasing debt does temporarily increase real economic output because it can bring future investments forward. Unreported inflation has an added benefit of appearing to grow real GDP whether there is growth or not since prices rise which is politically beneficial.
Central bankers ultimately work for the state which we get to see in many ways, so they've helped to increase unreported inflation by fudging the numbers, they've increased general indebtedness by artificially raising prices and lowering borrowing costs, and they help keep governments afloat by letting them to gather more taxes and inflate way their debts without appearing to inflate away their debts. Workers fall behind while the government gets to pretend they're doing so well.
The wage/price spiral is a wonderful bit of propaganda that blames the working and middle class for the effects of too much money in the system caused by the government and banks. Wages are just another price, workers getting fairly paid in terms of purchasing power isn't the cause inflation -- if they succeed and that looks like constantly rising wages despite stagnating purchasing power, then that's the nature of the broken system driving up all prices, not the nature of getting raises.
The ultimate effect of all this is to take power away from the masses and bring it together in the hands of the richest most powerful people on earth in ways that don't piss people off since you can raise their wages every single year and still be implementing across the board pay cuts every year, implement tax increases every year and benefit reductions every year while claiming you're doing the opposite, and slowly drive the working and middle classes into debt slavery without ever directly forcing them to do anything.