michael_nielsen

Has any country used inflation as the primary, official way to raise revenue instead of taxes, a la Tezos? (Please don't answer "Weimar Germany". I'm asking for governments where that's the explicit, accepted source of funds rather than a desperate emergency measure)https://twitter.com/FEhrsam/status/949355741160206336 …

I remember listening to Pauline Hanson - who ran an Australian political party - propose "printing more money" as a primary means of finance. TBC, she wasn't talking about quantitative easing etc, she just thought of it as a budget fix-all. Never implemented, fortunately.

If we could tax all wealth at the same rate with no leakage (i.e. exactly X% of every dollar went to the govt) wouldn't this be roughly equivalent?

The problem seems to come when you go too far, bringing it from a steady, predictable rate to uncontrollable hyperinflation, right? Inflation as a funding mechanism isn't inherently problematic (afaict)

I don't know. IIRC, inflation targetting aims for 1-3% per annum, & seems to work pretty well. I presume that's based in part on models of what people can tolerate, but I've never read the justifications.

I’ve often wondered what this number is a function of.

Probably a psychological threshold more than anything. A rate with significant impact on value over time but slow enough that it doesn't cause individual people in the economy to act radically differently/erratically day-to-day