With inflation, some recipients of money―those closest to the inflation process―are more equal than other recipients. From Lennarts Wagemans at mises.org:
Many claim the problem with fractional reserve banking is that it loans money into existence. It does, but under normal circumstances the money created by commercial banks disappears when loans are repaid or defaulted on, which therefore doesn’t create a permanent inflation of the money supply. Government intervention, however, converts temporary money into permanent money through bailouts like the Troubled Asset Relief Program. They purchase loans that would have been defaulted on, preventing the evaporation of credit. When banks hold loans that are at risk of default, they face having to write them off, which would remove this part of the money supply. Bailouts turn such disappearing credit into permanent money, in effect giving banks free money.
Without government bailouts, banks would be unwilling to make loans that are unlikely to be repaid, thus limiting their willingness to loan large amounts of money into existence. This would keep the money supply more stable. At any time, some part of the money in existence would still be destined for removal through repayment. This proportion would somewhat fluctuate with economic conditions, and the temporary money would be indistinguishable from other money until a loan is repaid, but new money would not continually get loaned into existence.
When high-risk loans inevitably fail, the state steps in to purchase them to prevent banks from having to write off so many loans that they have net negative assets on their books. However, seeing the creation of toxic loans as just excessive risk-taking in reaction to having a safety net misses the larger dynamic. Praxeologically, the production of toxic loans is the rational supply of a good in high demand. These financial assets can be sold for a higher value than it costs to make them, thus their production is economically rational.
Inflation is created by government printing more money to cover both its planned yearly budget deficit and its claimed “forced, unplanned” bail outs.
But, but, but, muh equality of results for all?
To each according to his need, workers of the world unite.
We’re all in this together, the New Civility.
As for some are a little more equal, the apparatchiks are the lightworker beings that we have been waiting for.
Forward!
Breaking from Hostages Of Ayatollah:
Community Cares.