Since taking over from the late Hugo Chávez in 2013, Nicolás Maduro has seen the bolivar lose 99.81 per cent of its value against the US dollar. The government has increased the money supply, but that has stoked inflation, predicted by the International Monetary Fund to pass 2,000 per cent in 2018.
We actually have this real world example of what happens when the government just prints more money to pay for government spending. Odd that the Senior Lecturer doesn’t see it really, isn’t it?
His answer would be, as we know, just raise the tax rate to curb the inflation.
What tax rate do you need to curb a 2000% inflation rate?