Definition: "Inflation is an increase in the amount of money in circulation, without a corresponding increase in the amount of goods and services produced."
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I have presented this item because it relates to so much of what has been going on in this country.
In 1967 I had been an officer in the U.S. Air Force for about seven years and had made the decision to leave the service and return to civilian life. Because I had not completed my college education I had signed up to take some college courses for credit before I left the service. One of those was a course in economics. The very first class session the professor wrote the above definition of inflation on the blackboard and told us we would be required to write it down verbatim on every Friday's weekly test. He was true to his word.
Even though you hear the media and politicians use it as such the first thing to understand about that definition is that inflation is not the same thing as rising prices. Inflation causes rising prices and it occurs when the government spends or obligates more than it collects in tax revenue. Why? Remember, according to the definition, there are no additional goods or services in the economy, but there is more money in circulation, and therefore greater demand, and that, in turn, means rising prices.
Inflation causes rising prices and therefore increases your "cost of living." The insidious part is that it has exactly the same effect as an increase in your direct tax liability, except that, in this case, it isn't visible as an item on your IRS 1040 tax return, or as an item shown as "tax" on the cash register receipt you get at the grocery store. It just shows up as an increase in the base price of gasoline, groceries, electricity, clothing, insurance, apartment rent, and everything else you purchase. It therefore makes it impossible to determine the true cause of the higher prices. Another point to realize is that according to the definition businesses cannot cause inflation and unions cannot cause inflation because neither of them has the ability to directly cause the government to engage in deficeit spending.
INFLATION IS A TAX, A HIDDEN TAX, AND YOU ARE THE ONE WHO PAYS IT!!!!