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  • Writer's pictureLeRoy Cossette

Inflation Isn't an Accident - It's Government Policy

The federal government's propaganda arm, the mainstream media, consistently pushes the government and central bankers' narrative that they don’t have the foggiest idea of what caused inflation.


They will blame supply chain problems, Putin’s war in Ukraine, greedy corporations jacking up prices on their products, or our expectations for driving price inflation higher. They can’t tell you exactly why prices keep rising, but remember, they are the government, so trust them—they’re doing their best to stop it!


But this is all deflection and mudding the water. The federal government is causing price inflation, plain and simple. When Congress or the reigning Administration blames everything and everywhere else, they’re either indefensibly ignorant or lying.


According to economist Milton Friedman, inflation is always a monetary phenomenon everywhere, and economist Daniel Lacalle put the real problem where it belongs when he stated, “The government’s destruction of the currency's purchasing power is a policy, not a coincidence.”


But why? Why would the government devalue its own currency? The answer is simple – it’s the only way to keep making the government bigger without causing a revolt.


Nothing the government does is free. The citizenry ultimately forks over every penny the government spends. But the bureaucrats know they can only raise direct taxes so high before the citizens pull out the torches and pitchforks. To avoid this, the government borrows money. But borrowing doesn’t solve the problem. It just accumulates debt, which has to be repaid.


Our Nation's national debt stands at nearly $34.6 trillion. The Biden Administration spends more than half a trillion dollars every single month, running massive deficits that push the debt higher at a staggering rate. But that’s just a drop in the bucket compared to unfunded liabilities that the government will have to cover in the future.


The estimated unfunded Social Security and Medicare liability alone is $175.3 trillion. That’s six times the U.S. GDP. As Lacalle put it, “If you think that will be financed with taxes ‘on the rich,’ you have a problem with mathematics."


So, how do politicians and bureaucracy try to “fix” the problem? With the inflation tax.


This is precisely why our government wants to devalue U.S. currency. As Lacalle explains, "inflation is the equivalent of an implicit default. It is a manifestation of the currency issuer's lack of solvency and credibility.”


However, the average American citizen doesn’t realize this reality because government officials have effectively redefined inflation and can blame rising prices on “the reasons,” which are manufactured to deflect the blame from themselves to whatever the reason they create. Inflationary policies allow the government bureaucracy to continue borrowing and spending unconstitutionally under the blame others cloud.


Lacalle explained, “Governments know that they can disguise their fiscal imbalances through the gradual reduction of the currency's purchasing power.” This allows the federal government to:


  • Transfer wealth from individual savings and real wages, which is a disguised tax.


  • Confiscate wealth from the private sector, making the productive part of the economy assume the currency issuer's default.


  • Impose the utilization of the devalued currency by law and force economic agents to purchase its bonds via regulation.


"The entire financial system’s regulation is built on the false premise that the sovereign bond is the lowest-risk asset. This forces banks to accumulate currency—sovereign bonds—and

regulation incentivizes state intervention and crowding out of the private sector by forcing through regulation to use zero to little capital to finance government entities and the public

sector."


The result?


An ever-growing government bureaucracy at the expense of the private sector and the economic well-being of the average American household.


When the federal government has exhausted its fiscal assets, the effect on credit adds to the rising taxation levels which cripple the potential for a productive economy in the private sector in favor of constantly rising government unfunded liabilities.

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