“Excessive supply of money and deliberate inflation is of course another form of taxation. Resort to deficit spending or manipulation of inflation is one way in which weak democracies or authoritarian governments, lacking the legitimation which would be needed to increase taxes and bring revenue in line with expenditure, try to avoid facing the problem.”
From an article by Giacomo Luciani in the 1988 Arab Studies Quarterly (Vol. 10 #4), which I’m reading for a class on Middle Eastern Politics and Society.
Of course, the author is talking about weak Middle Eastern democracies – but the same logic should apply here too. So what do you think: is our government’s recent printing of money all over the place making us a weak democracy?
Crap. I sure hope not.