Musings on economics and politics, with a special interest in free banking and monetary disequilibrium.
OT, but fun to think about. Although I am not sure what this chart means, all by itself. Usually, we hear that inflation, or rather an increase in the rate of inflation, represents a shift in income and wealth from creditors to borrowers. Some people regard this as bad, although businesses and real estate developers are borrowers, as are (usually) homeowners.The evil word "redistribution" is often used to describe the effects of inflation. Satan himself rubs his hands in glee at the thought of increases in the inflation rate. However, we use federal income taxes to pay off the national debt (payroll taxes finance the entitlement programs).As has been endlessly repeated in right-wing blogs, rich people pay income taxes. Poor people get off the hook entirely, and therefore like big government. Hmm. If true, that means an increase in the rate of inflation (and subsequent deleveraging) means the national debt is relatively smaller, and less of a burden on the wealthy. Indeed, monetizing the national debt through QE lifts the debt right off the shoulders of the wealthy, allowing them to spend their substantial loot on productive investments (or even larger mansions).So, given the nature of our income taxes code, do increases in inflation really harm lenders? Does QE and monetization really harm the wealthy---or just unburden them?
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