Banana Republic?

Arnold Kling has a great post where, among other things, he provides a very understandable explanation of “Ricardian equivalence.” The real subject of the post is our economic future, the money line being:

My point is that sooner or later the U.S. government is going to have to get serious about stripping the assets of those of us who have tried to live within our means.

Now, if this makes you think of some new draconian tax, you’re probably wrong. The easy way to do it is to simply inflate it away, leaving your retirement nest egg whole but reducing it’s purchasing power. There are ways for individuals to avoid this, but it requires some study and a lot of work. Consequently, most people won’t be able to avoid it.


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