“Congress has been spending more money on you but has been unwilling to raise taxes. As a result, it has imposed inflation as a tax, that’s one tax you don’t have to vote for, but you have to pay.”
That’s a quote from Milton Friedman, the famous conservative economist, talking about the role the government can play in inflation.
In my previous article, Inflated Fed-Head, I talked about why the economy is the way it is and how the actions of the government and private businesses left the country to pay for these actions with inflation.
But the country is also paying in different ways, which allow the government and the private sector to participate in what seems like rogue economics.
To me, rogue economics is when certain economic actors “go rogue.” They act in unexpected ways and go off script without regard to the risks of those actions.
And when both the government and the private sector participate in rogue economics simultaneously, we are left with significant problems like moral hazard and the breakdown of the fundamentals of capitalism.
So, let’s look at how both the government and the private sector participate in this type of rogue economics and how it can lead to moral hazard, the disintegration of capitalism, and further economic problems due to the financial system’s susceptibility.
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