Investments have to meet an estimated inflation barrier of 6% right now just to break even with inflation THEN they get taxed as well on that 6% gain!
And 6% isn't an easy target to reach for safe conservative investments like a retirement account.
So the gov't borrows money, has the power to make the money they borrowed worth less to pay back, then taxes everyone on earnings on this newly inflated money.
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Keep in mind that nominal inflation-driven gains are taxed, so even perfectly inflation hedged investors (not many are) end up behind in real terms.
Investments have to meet an estimated inflation barrier of 6% right now just to break even with inflation THEN they get taxed as well on that 6% gain!
And 6% isn't an easy target to reach for safe conservative investments like a retirement account.
So the gov't borrows money, has the power to make the money they borrowed worth less to pay back, then taxes everyone on earnings on this newly inflated money.
What a racket!