The other major inflation conspirator (and greatest beneficiary) is government.

 The other major inflation conspirator (and greatest beneficiary) is government.

 Think of inflation as oxygen for politicians and carbon monoxide as a public vote cast to raise taxes. Steady (2 percent, say?) inflation creates a reliable ratcheting effect on every taxpayer in the land, and a nice, smooth, foamed runway for bureaucrats. And should our benevolent leaders decide the inflation/tax runway isn’t wide enough or smooth enough? They simply borrow the difference (i.e., the deficit) and inflate that away too!

Inflation created by central banks allows government to ALWAYS have the money it wants—and be first in line to get it. If deflation were operative—as would be the case in a properly functioning economy where productivity improvements flow into lower prices—government would have to explicitly tax instead of relying on inflation to drive revenue and devalue debt. Politicians’ careers would be much, much shorter.

In summary, there’s a reason deflation rarely (if ever) happens. Inflation makes bankers’ and bureaucrats’ lives easier and keeps them in power. The cost of a simple hamburger would be far lower without ever expansive government and the willful destruction of our money. But it will never happen as long as bankers and bureaucrats work in perfect symbiosis to execute a massive skim on the American people.