John Maynard Keynes: Inflationary Measures

Posted by admin on Monday, August 2, 2010

John Maynard Keynes Money Quotation blames government for preventing the citizenry from becoming or remaining wealthy by encouraging inflationary measures.
 
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens Quote
 

“By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens” — John Maynard Keynes

 

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John Maynard Keynes is highlighting how inflation can effectively function as a hidden tax on citizens imposed by governments. The quote suggests that by continually allowing prices to rise through monetary policies that fuel inflation, governments are able to secretly and indirectly seize or “confiscate” a portion of the real value of citizens’ wealth over time.

Even as nominal assets like savings remain the same on paper, their purchasing power declines due to the covert tax of inflation. Keynes sees inflation as a means for governments to covertly take an “important part” of what citizens have earned and accumulated without generating much public opposition compared to explicit taxation.

The overall interpretation is that Keynes viewed inflation as giving governments a surreptitious way to levy a tax on wealth.

Birthday: June 5, 1883 – Death: April 21, 1946

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