Inflation refers to the general increase in the prices of goods and services over time. It is a common economic phenomenon that can have significant and far-reaching consequences.

Inflation Acts as a Tax on Consumers

When prices rise, the same amount of money can buy fewer goods and services. This reduction in purchasing power is similar to a tax because it effectively reduces the amount of disposable income that consumers have available to spend or invest.

Inflation Acts as a Tax on Investors and Savers

When inflation is high, the returns on investments and savings may not keep pace with the rising cost of living. This means that the investor is effectively paying a tax on their investment, as they are losing purchasing power due to inflation.

Inflation Acts as a Tax on Debtors and Creditors

Inflation reduces the real value of debt over time, meaning that borrowers can repay their loans with currency that is worth less than when they borrowed it. Conversely, creditors may receive loan payments that are worth less than when the loan was issued. Therefore, inflation can act as a tax on both debtors and creditors as it alters the real value of their financial obligations.

Inflation Affects Government Revenue and Spending

When prices rise, tax revenue increases, as taxes are typically based on the value of goods and services. This can lead to increased government spending, which can in turn fuel further inflation. In this sense, inflation can be seen as a self-reinforcing cycle that ultimately acts as a tax on the entire economy.

Conclusion

Inflation is often considered a tax because it reduces the purchasing power of currency, acts as a hidden tax on consumers and investors, affects debtors and creditors, and impacts government revenue and spending. It is essential to be aware of its implications and potential consequences so that we can make informed financial decisions and plan for a more secure financial future.

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Throughout the 20th century, the modern political environment started to shape itself as we know it today. During the post World War II period, voices that would not have been heard before started being heard. Liberal agenda and united Europe in alignment with the United States became a priority. The peace politics were quickly drifted towards the cold war and its impact on the internal politics of countries across Europe and North America. Moreover, the collapse of the Soviet Union and the fragile state of the Russian Federation put western politics in the leading role globally.

At an individual level, leftist and right-wing political platforms developed in almost all European and North American nations. After decades of war and uncertainty, they finally started competing with their ideologies and ideas to support local communities, rather than war and international affairs.

Populism has been a part of this process for a very long time. Even before the 20th century, many of the royalties used to keep themselves in high positions of political influence through populist statements and promises. However, populism in the second half of the 20th century took a shape that managed to adjust to the electoral democracies in the west. Whether it was about right or left-wing politics, populism became a crucial part of running political campaigns, particularly prior to elections.

Libertarianism at a glance: the brief overview of values

One of the leading ideologies of right-wing politics is libertarianism, yet, many of the modern libertarians reject the essence of the political spectrum (left-right). Political platforms that identify themselves with this movement are supportive of all individual freedoms and equality. They are extremely fond of private property, emphasizing their role in modern society. The vast majority of libertarian parties, entities, and individuals support mass privatizations, similar to what occurred in the United Kingdom under the leadership of Margareth Thatcher. This era of British history and the style of leadership called “Thatcherism” is often compared to libertarianism, as a milder form of what a completely libertarian government can result in.

Besides private property, libertarians are also in favor of abolishing some and reducing the majority of taxes. In their view, the individual knows better how to spend their money than the government or any other entity. They are against state-run institutions that gather funds from taxpayers while supporting austerity policies and spending cuts. The ideal government for a libertarian party is considered to be smaller in size, more compact, and easy to manage. Privatization is one of the ways such platforms aim to achieve compact governments – with fewer properties and institutions to take care of.

With its core principles, many libertarians are extremely close to liberal conservatives. Yet, the famous conservative historian and thinker, Russell Kirk, in his brilliant essay “Chirping Sectaries” described the libertarian-conservative alliance as “like advocating a union between fire and ice”. So what are some bigger differences that spark the fire in libertarian policies?

First and foremost, libertarian politics are in favor of allowing and completely legalizing many taboo sectors. One of the most significant examples is gambling. Australia is a country that has been under labor or conservative leadership for decades now. The libertarian movement is lagging behind significantly while virtually no one supports such policies across the country. Although both the left and the right have been in leadership of the nation, gambling still remains largely illegal. Almost every new online casino in Australia provides services to their customers by utilizing legal loopholes. Some others are based overseas to avoid facing legal actions from the government.

On the other hand, industries like gambling and prostitution have been legalized in countries with significant libertarian powers. Besides those two, drugs and their legalization is another aspect which attracts a lot of attention from libertarians. In their belief, individual freedom is restricted if one does not have the possibility to use any substance, should it not be a risk to others around them.

Why is libertarianism often compared or misinterpreted as populism and vice versa?

At a glance, the libertarian policy is very radical and extremely individual-oriented. This completely is true except for it being called essentially radical. There are countless libertarian platforms all around the world and their policies vary from one to another. Yet the core values remain the same and that is what makes libertarianism such an easy and simple ideology to understand. Individual freedom is of utmost importance while private property is in the center of economic development. So what makes libertarianism so commonly affiliated with populism?

As mentioned before in the article, populism has been a part of the global political environment for a long time now. The very idea of populism being essentially bad is wrong and misleading. Populism is using any idea and approach that would appeal to the general public. Any idea, whether it is leftist or right-wing ideology could end up being called ‘populist’ just because for the vast majority of the population, it sounds somewhat appealing.

However, every ideology and movement should be put in the context of time and place in order to evaluate whether it is truly populist or now. As for the libertarian ideology, the time has never been better to speak up. There are many people now who support the radical right-wing economic agenda. That is exactly what makes libertarianism look like a populist agenda of a liberal-conservative party.

Easing restrictions and regulations for both individuals and businesses while abolishing some taxes and reducing others indeed sounds populist for someone who does not share the ideology. However, there are bigger economic and political reasons behind such decisions and suggestions. Reducing taxes is not just an election promise to make the party more appealing. Rather, it is a part of the whole ideology that the movement carries. A similar statement from a political union that shares leftist or softly liberal economic views could fairly be dubbed as populist.

On the other hand, many people who openly declare libertarianism a harshly populist movement forget about their other, non-economic policies that are far from popular among the general public. For instance, drug legalization is not approved by the majority of people in almost all US states while being widely criticized across Europe with very few exceptions. The same goes for prostitution. Therefore, it is simply unfair to affiliate an ideology with populism, which in itself is not essentially a bad thing, while ignoring the vast majority of its radical, brave policies.

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The beginning of a new year is a great time to take a step back and see where you stand and where you need to go in life next. It is the time to start making improvements in your life. A good place to start is with your finances.

Whether you want to set up your retirement fund or buy a house, setting financial goals for yourself can help you work towards the life you want. While you may have some specific goals in mind, here are a few basic points that will help you utilize your money to its full extent.

1.    Create a Budget

One of the best ways of managing your money better is to plan a budget for yourself. You can start by calculating all your major expenses including living expenses, insurance premiums, and other monthly bills like loan or mortgage payments.  This will help you determine how much money you need to spend and how much money you can save.

If you are unsure about how and where you spend your money, tracking your expenses using an online tool or an app can be useful. This will not only give you a fair idea of how much you pay for your essential needs but will also help you to single out any unnecessary expenses. Once you have determined how much money you will need for all your fixed monthly expenses, you should make a budget based on that figure. Once you have done this, you should calculate how much money you’ll be left with. You can use this leftover money to set yourself up for the future. 

After setting your budget, set aside that money and use it only for its intended purpose. Sticking to your budget is probably the most challenging and vital step of having control over your finances. If you manage to do this, other steps that follow should not prove to be difficult.

2.    Manage Your Debt

Having debt does not mean you are bad at managing your finances. Loans and credit are sometimes essential and practical, especially if you have taken a loan to buy a big asset like a home. However, they can become a problem if you feel overwhelmed by your debts. If you are finding it difficult to manage your living expenses due to your monthly loan payments, then you have a problem.

Make it a goal in the New Year to get your debt under control. You can do this by following a few simple steps. The first step in doing this is to take stock of all your debt. If you have multiple ones, note down all the details for each. These details will include the total amount for each debt, the interest rate, the monthly installment, and the remaining tenure. Once you have all these details listed, you can start planning your strategy to eliminate them.

One of the most cost-effective ways to clearing your debt is to eliminate high-cost outstanding balances first. This is a good idea, as these are the ones that will cost you the most amount of money to prolong. You can start paying more money towards high-interest debt and continue making minimum monthly payments on the others. Once your biggest debt is cleared, you’ll have more finances in hand to manage your other needs.

Another way of managing this is by opting for a debt consolidation option. You can take a personal loan or check with the banks around you to see if they offer a debt consolidation option.  

3.    Prepare for the Unexpected

There are some events in life that bring unforeseen expenses. In order to avoid getting overwhelmed with such expenses, you should protect yourself with insurance plans. Here are a few types of insurance plans you should consider taking:

Health Insurance: You can protect yourself against big medical expenses by opting for a health insurance plan. Health insurance will cover your expenses in the case of serious illness or if you need to undergo a major medical procedure.

Life Insurance: A life insurance policy can help you make sure that your dependents have some sort of income in case of your death. First, you should check with your employer to see if you are covered under a group term insurance policy. Many employers offer an insurance policy to all their employees.

If you aren’t covered under any such policy, you should consider starting with a low-cost term life policy. If you think you have a lot of additional liabilities, you should look for an insurance plan that will cover all your needs.

Disability Insurance: Getting a disability insurance will help you in case you are rendered permanently disabled due to an accident or illness. If you are not able to continue working due to a disability, you will still have a source of income in the form of your insurance.

Asset Insurance: Protecting your assets, such as your home or car, with an insurance can help you avoid large expenses in case of accidental damage. Home insurance protects the value of your home in case of natural disasters or accidental fires. Getting an auto insurance will help you pay for accidental damages for your vehicle. 

4.    Focus on Savings

Saving for your future should be one of your financial goals for the New Year. Having savings is an important step in securing your future. It can help you take care of a lot of expenses by yourself, such as buying a house, paying for medical expenses, or dealing with a sudden loss of income. It will also help you manage your expenses upon retirement.

Some ways you can try saving money for your future is to opt for a retirement plan or invest in Fixed deposit, government bonds, mutual funds, and other saving schemes.

5.    Establish an Emergency Fund

Besides having savings and insurance, you should also consider having an emergency fund. You can start by putting aside some money every month for this purpose. This will help you be prepared if something isn’t covered by your insurance. Having this fund will not only help you manage your expenses, but it will also help you refrain from dipping into your savings in case of an emergency.

The Bottom Line

Remember that getting your finances in order is a long-term process. You should start by taking small steps and then you can slowly build upon them. Whenever you opt for any financial tools, such as insurance, fixed deposits, credit cards, and loans etc., you should always compare the options on tools or websites. Keeping yourself informed about the product you are taking will help you make decisions that are better suited to your needs. 

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