Home > Politics > Inflation is a Tax on Savings

Inflation is a Tax on Savings

It’s true! How is it possible? Here’s how:

You put your money in a bank savings account. I have one that pays a whopping 0.1% for interest.

The government runs the printing presses and generates some Fiat Money so that they have more money to pay down their debt. This money doesn’t really have any value, and all it does is divide up something of value more finely. Basically, by having more paper bills out there it becomes easier to get more of them. Because they are easier to get, it takes more to get something of value. It’s hard to grasp, so I made a picture!

Before and After - Looks more expensive, but it's just inflation...

Ok, so where’s the tax? Well, here’s the thing. My bank gives me 0.1% interest. The Current Inflation Rate is 1.10%. That means I am actually losing 1.0% on my savings – because of the government.

The government is causing me to lose money when I save it. It’s not a real tax, but it really does decrease the amount of money I get to keep.

What’s worse is WHY they are doing it. They’re doing it to pay for the socialist programs that nobody wants, and to try to pay down some of the deficit that Obama has given us. So, they devalued our country by bankrupting it, and now they are devaluing our savings by creating inflation.

Categories: Politics
  1. October 28, 2010 at 11:20 am

    It was certainly interesting for me to read that blog. Thanks for it. I like such themes and anything connected to them. I would like to read a bit more soon. By the way, pretty nice design you have at this blog, but how about changing it every few months?

    Katty Kripke
    escort agence

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