billydean05 said:
This "transitory" inflation has remained elevated for six years now.
By Uniparty design.. Trump has spent more than Biden despite DOGE and Drain the Swamp BS. (and I absolutely don't support the BS Biden and crew were doing either.)
How can they increase taxes -- inflation.... for those that don't get it:
Inflation functions as a tax by eroding the real value of money and nominal claims, transferring purchasing power from holders of cash, deposits, and fixed-income assets to the government (and other debtors).
Core MechanismWhen the money supply expands faster than the real economy (goods and services), the purchasing power of each unit of currency falls. Existing money buys less. This is equivalent to a tax on cash balances and nominal assets:
- Holders of currency, checking accounts, and non-interest-bearing or under-indexed deposits lose real wealth.
- The government (or central bank acting on its behalf) captures the difference through seignioragethe real resources it obtains by issuing new moneyor by reducing the real burden of its outstanding nominal debt.
- Creditors and savers lose; debtors with fixed nominal obligations gain. Since governments are typically large net debtors in their own currency, they are major beneficiaries.
Easiest example is housing because we all get hammered as a result....
The climb is real enough that it doesn't need help. In 1980 a median home ran about 3.6 times a median household's yearly income; it peaked at 5.83 times in 2022 and sits near 5 today and right now none of the 50 largest U.S. metros meet the roughly 2.6 ratio considered affordable. Because it's price divided by income, the paycheck side is already baked in.
This isn't the dollar shrinking; it's the thing itself pulling away from what people earn.Here's the number that makes it concrete: if household income had kept pace with home prices since 1980, the typical household would earn about $115,000 today instead of roughly $84,000 around $31,000 a year that housing quietly absorbed. That's the closest thing to a real, wage-adjusted measure of your "hidden tax," and it's a big number.
On the cause two of the biggest levers here genuinely are government. Cheap money is one: a decade-plus of very low interest rates after 2008, and again in 202021, flowed straight into assets and bid home prices up, which is the purest form of the transfer you're describing it rewards whoever already owns and penalizes anyone trying to buy in with cash savings.
Restricted supply is the other, and it may be the single biggest structural driver: zoning and land-use rules mostly
local-government decisions throttle how many homes get built, so demand keeps outrunning a supply that policy won't let expand.
