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this post was submitted on 22 Jul 2023
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In other words, it’s similar to a tax in that the money you earn today, by the time you spend it, is worth less by design.
Inflation does has have a positive feature of encouraging investment and spending, rather than hoarding under a mattress. The money is put back into the economy because every day it isn’t, it loses value. If money were getting more valuable over time (called “deflation”), you’re incentivized to treat it like an asset—not a currency—and hold onto it as long as you can (like Bitcoin), rather than reinvest or spend.