Fun Fact: All Government Spending Is Taxation ⁣

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(And no I'm not meaning to get political) ⁣

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This is purely a consequence of how our modern monetary system works. It's related to how money comes into existence in the first place and is a curious quirk of our financial system ⁣

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In order to be able to spend, there are only two ways in principle that a Government can generate income: ⁣

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1. Taxation ⁣

2. Money Printing (Quantitative Easing) ⁣

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If we look at number 1 it's pretty intuitive to realize that if a Government wishes to increase revenue for spending via this method it must put taxes up ⁣

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However, how the second method results in increased taxation is less obvious. If a Government prints money it subsequently increases monetary supply. Every time this happens cash becomes more abundant. Unless there is a proportional increase in the amount of resources that can be purchased with that cash (this rarely happens) then inflation occurs, and prices go up ⁣

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It's a functional necessity of our economy for there to be at least some inflation. This in effect causes us to lose wealth which becomes money in the Government's pocket. For this reason, it is known as “The Silent Taxation” or “Taxation Without Consent” ⁣

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And so now, we see why the title of this article is valid. Something interesting to think on when it comes to our collective thesis of money - food for thought