Inflation is a mechanism that government people use to fund wars, tyrannical governments, and favors to cronies. Inflation takes away significant fractions of the real value of savings. Savings are accumulated slowly. Inflation depletes savings’ real value quickly.

Inflation most greatly hurts the people who earn less income and retirees, whose income doesn’t inflate as much and who therefore can’t reaccumulate savings. Through inflation, governments take big chunks of the real value of all people’s savings without just compensation. These inflation takings are only seemingly sporadic. Government people keep spending more, so they keep privileging crony bankers to create more money.

Governments borrow this money directly, spend less on current interest, and spend less real value on future interest . As long as government people keep spending more, inflation continues across the decades seemingly endlessly. But slash the spending, end crony bankers’ privilege to create money, and end government money creation, and inflation takings will rapidly begin to be justly compensated for. Governments add value only to the extent that they make unalienable rights secure.

So governments generate no money of their own to pay just compensation to large groups of people from whom they have taken. If government people were to seize more money and then claim to be paying this money back to taxpayers, the taxpayers themselves would be paying for everything they would receive. So not only would the taxpayers receive no net benefit, but they would also lose part of this money, which would go to paying government middlemen to do this to them. When government people grab nonrecurring takings from large groups of people, the only way government people can provide just compensation is to greatly limit their ongoing takings.

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Source: JAMES ANTHONY | MISES.ORG