point of the price comparison was to ballpark the rate of inflation which currently exists
Your point lacked also the increase in hourly earnings. If the price for everything goes up 3 times but your earnings also go up 3 times for the same work, you didn't lose anything.
As for how inflation is a hidden tax, welcome to capitalism. Moderate inflation (around 2%) is needed in our current economic model. Stagnation or even deflation have devastating effects on a capitalistic society. Same goes for hyper inflation.
Hyper-inflation is a special case wherein confidence in the government issuing the currency has basically collapsed; let's set that to one side.
I have no problem imagining a capitalistic nation-in-a-bottle which matches the expansion of the money supply to population growth and a pound of potatoes in 2020 costs the same as a pound of potatoes in 1980. Where do the devastating effects of a stable currency come from, other than in trade wars caused by the debased currencies of other nations? We can do capitalism without fractional reserve lending, we just get a slower velocity of money.
Well you're seeing some obvious flaw that I'm not. How does 2% inflation stave off devastating effects on capitalism? Is it a velocity of money issue? Or is it a matter of all nations needing to devalue currency at the same rate to keep trade steady?
You can take a look at countries which are battling higher inflation rates like Turkey.
And you can take a look at countries which are battling deflation like Japan.
No one wants higher inflation rates (above 4% or higher), because like you said it's a tax on savings, especially on savings of the retired. In such scenarios banks have to limit their loan output, which leads to lower investments.
And no one wants deflation. Lower prices lead to lower revenue for companies. Lower revenues lead to layoffs and lower wages for workers. It would be great for anyone with huge amounts of savings, but it would be devastating for the majority of working people.
So the best way under capitalism is to have moderate inflation around 2%. That's low enough so it doesn't effect the savings of the retired on a massive scale.
Your point lacked also the increase in hourly earnings. If the price for everything goes up 3 times but your earnings also go up 3 times for the same work, you didn't lose anything.
As for how inflation is a hidden tax, welcome to capitalism. Moderate inflation (around 2%) is needed in our current economic model. Stagnation or even deflation have devastating effects on a capitalistic society. Same goes for hyper inflation.
Hyper-inflation is a special case wherein confidence in the government issuing the currency has basically collapsed; let's set that to one side.
I have no problem imagining a capitalistic nation-in-a-bottle which matches the expansion of the money supply to population growth and a pound of potatoes in 2020 costs the same as a pound of potatoes in 1980. Where do the devastating effects of a stable currency come from, other than in trade wars caused by the debased currencies of other nations? We can do capitalism without fractional reserve lending, we just get a slower velocity of money.
What you describe are pipe dreams. As realistic as functioning Communist countries. Nations-in-a-bottle don't exist. These are just idealistic dreams.
Well you're seeing some obvious flaw that I'm not. How does 2% inflation stave off devastating effects on capitalism? Is it a velocity of money issue? Or is it a matter of all nations needing to devalue currency at the same rate to keep trade steady?
You can take a look at countries which are battling higher inflation rates like Turkey.
And you can take a look at countries which are battling deflation like Japan.
No one wants higher inflation rates (above 4% or higher), because like you said it's a tax on savings, especially on savings of the retired. In such scenarios banks have to limit their loan output, which leads to lower investments.
And no one wants deflation. Lower prices lead to lower revenue for companies. Lower revenues lead to layoffs and lower wages for workers. It would be great for anyone with huge amounts of savings, but it would be devastating for the majority of working people.
So the best way under capitalism is to have moderate inflation around 2%. That's low enough so it doesn't effect the savings of the retired on a massive scale.