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No, it's not metaphorical.

If in January, you can buy something for $1, then in February because of inflation it becomes $1.10, that's a 10% tax increase.

https://www.youtube.com/watch?v=NgSqZKx0mNI




> No, it's not metaphorical

It is, though largely due to confusion rather than intentional metaphor. (Exception: when described as a “shadow tax,” though that is still a close metaphor and only applies to debt-monetising monetary inflation.)

> If in January, you can buy something for $1, then in February because of inflation it becomes $1.10, that's a 10% tax increase

You’re confusing taxes and costs.

When Russia invaded Ukraine, they didn’t levy a tax on poor Egyptians even though Moscow’s actions raised their food costs. Cost increases are taxing [1]. Confusing something taxing with a tax [2] is a common mistake but still wrong. (And valiantly wrong in a policy context.)

[1] https://www.merriam-webster.com/dictionary/taxing#h1

[2] https://www.merriam-webster.com/dictionary/tax


Tax is a cost.

If a government spends more than it takes in, in taxation, the difference has to come from somewhere, and invariably, it comes via inflation.

The choice to spend more than the governemnt has, is a choice, and is imposed, so is a tax.


> Tax is a cost

Not all costs are taxes…

> If a government spends more than it takes in, in taxation, the difference has to come from somewhere, and invariably, it comes via inflation

Governments spent more than they earned before fiat currencies. They made up the difference by borrowing. Borrowing isn’t fundamentally inflationary; this is trivial to show with commodity money.

> choice to spend more than the governemnt has, is a choice, and is imposed, so is a tax

Every commemorative bill is a government choice. That doesn’t make National Talk Like a Pirate Day a tax proposal [1].

Consider the implications of your definition. Every cost and every government choice is a tax. At this point, taxes are so naturally occurring as to make the word meaningless.

You get a pay raise? A tax on your employer! Tesla stock goes up? Musk is taxing you! Governor went on a walk instead of driving? Taxation! Cat got sick? Mittens is taxing me with vet bills!

[1] https://en.m.wikipedia.org/wiki/International_Talk_Like_a_Pi...


> every government choice is a tax

I realize you have interpreted my comment as suggesting this, but that really wasn't my intent. It was really just about tax vs spend, and if they differ.


> It was really just about tax vs spend, and if they differ

Consider a kingdom on the gold standard that borrows the gold it spends.

Their actions do not change the monetary base. They do increase the velocity of money, but by no more than had they taxed it (minus wealth effects).


> that borrows the gold it spends.

I must be retarded because I don't see how this makes a difference. Even if you're getting 0% interest loan (unlikely) you still have to pay it back, which will eat into future taxation? And if you don't pay it back they would be justified adding duties to all exports, recouping that way, by inflated prices...

> Their actions do not change the monetary base.

Assuming they don't find more gold...


> which will eat into future taxation?

Yes. But the amount of gold in the system is always conserved. Monetarily, the fact that it's borrowed is irrelevant.

Also, if the borrowing is used to increase economic activity, it need not eat into future taxes for anyone. The classic example is borrowing to buy upgraded farm equipment, or to irrigate previously-fallow land.

> Assuming they don't find more gold

Orthogonal and thus irrelevant to the question of whether borrowing fundamentally causes inflation.




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