5 REALLY Stupid Things Politicians Said About the Inflation Catastrophe
Inflation is a nasty phenomenon from nearly every angle*. It destroys your savings, erodes the purchasing power of your salary (ultimately making your time less and less worthy), and increases your expenses that are indexed (eg: rent).
Governments may benefit from inflation since it reduces debt and may also increase tax collection if the authorities don’t update the wage thresholds for tax exemption. There are also a few ways investors can benefit from it.
As a side effect, inflation often causes interest rates to go through the roof. This makes mortgages more expensive and kills business demand, leaving a lot of people without homes or jobs.
Increasing inflation was also one of the factors that eroded the confidence of the Russian people in Czar Nicholas II, resulting in the rise of the Bolshevik party and the murder of the czar and his family.
This is not a small deal. Inflation is the kind of thing that, out of control, may eat entire countries and civilizations alive.
Still, our elected officials (or those chosen by them) know so little about it, enough for a dropout from economics school to be appalled by such ignorance. Sometimes I even start to doubt if it’s just ignorance or if these leaders deliberately adopt such destructive postures.
Because some adults try to put out a fire with gasoline because they are illiterate and do not know how to read the label written “fuel”. But others do it because they want to see the city burn.
Which one is the case for our leaders? Check the quotes below and decide for yourself.
Every time we put money in, prices go up
Who said that?
Alberto Fernandez, the President of Argentina, in June of 2022.
Why is it stupid?
Because this is the very definition of how inflation happens. If more money is printed without increasing industrial output, the same amount of goods will be traded with a…