"Inflation Is Always a Political Choice: From Friedman to a Future Without It"

"Inflation is always and everywhere a monetary phenomenon." - Milton Friedman, BBC Lecture, 1974

Introduction: The Lie We're Still Living

Fifty years ago, Nobel laureate Milton Friedman warned the world: Inflation is not caused by unions, greedy

corporations, or consumers; it is caused by governments. Full stop.

Fast forward to today: central banks print trillions, political leaders promise stimulus without restraint, and

inflation has returned, eroding savings and livelihoods. The truth is brutally simple: governments create inflation by spending what they do not have and paying for it by printing what they should not.

The Mechanics of Deception

Governments have found a politically convenient trick:

- Instead of raising visible taxes, they print money.

- This inflates the currency supply while productivity lags.

- The result? Rising prices, falling purchasing power, and a silent tax on the poor and middle class.

Friedman called this "taxation without representation." No budget vote. No tax collector. Just stealth.

The Evidence: Then and Now

Friedman's own research (1964-1974) showed:

- In every major industrial country, consumer prices closely tracked money supply growth.

- Wherever money supply rose faster than output, inflation followed.

- Periods of "unabsorbed inflation" led to future economic pain.

And today?

- The same pattern continues.

- U.S. M2 money supply ballooned by over 40% from 2020 to 2022.

- Inflation hit 40-year highs, proving that the lesson remains unlearned. 

The Problem: Structural Political Cowardice

Why do governments keep printing?

- Voters demand services.

- Politicians fear tax hikes.

- So they cheat reality by inflating the currency instead.

The central banks, complicit or confused, act to "stimulate" the economy, ignoring the delayed, but

devastating costs.

The Solution: Zero Inflation, Zero Illusions

We no longer have the excuse of ignorance. The solution is not complex, but it requires discipline.

A modern framework for stability:

1. Zero Inflation Target - Inflation is a choice. We should choose zero.

2. Cap Interest Rates at 4% - Prevent debt traps and speculation spirals.

3. Limit Money Supply Growth to 2% - Only permit expansion when matched by productivity gains.

4. Constitutional Accountability - Mandate strict monetary policy frameworks beyond political interference.

5. Transparency & Real-Time Reporting - Every dollar printed, taxed, or borrowed should be public knowledge- daily.

Why This Matters

- Inflation isn't natural. It is engineered by weak policy.

- Savings are stolen silently over decades.

- Governments grow larger while citizens grow poorer.

Friedman saw it coming. We are now living the consequences he warned of. But unlike his time, we now have both the data and the tools to enforce restraint.

The Final Word

Inflation is not an economic mystery. It is a political betrayal.

As Milton Friedman taught, and as modern failures confirm, if you want stability, growth, and fairness, start by ending inflation.

The road forward is not easy. But it is necessary. And it begins with one clear realization:

Inflation is not inevitable. It is a policy choice. We must choose differently. 

📉 The Mechanics of Deception

Governments have found a politically convenient trick:

• Instead of raising visible taxes, they print money.

• This inflates the currency supply while productivity lags.

• The result? Rising prices, falling purchasing power, and a silent tax on the poor and middle class.

Friedman called this “taxation without representation”. No budget vote. No tax collector. Just stealth.

✅ The Solution: Zero Inflation, Zero Illusions

We no longer have the excuse of ignorance. The solution is not complex, but it requires discipline.

A modern framework for stability:

1. Zero Inflation Target
   Inflation is a choice. We should choose zero.

2. Cap Interest Rates at 4%
   Prevent debt traps and speculation spirals.

3. Limit Money Supply Growth to 2%
   Only permit expansion when matched by productivity gains.

4. Constitutional Accountability
   Mandate strict monetary policy frameworks beyond political interference.

5. Transparency & Real-Time Reporting
   Every dollar printed, taxed, or borrowed should be public knowledge—daily.

SOURCES:

Peter Clarke is Executive Chairperson of Ellis Clarke and a lifelong advocate for economic responsibility, democratic accountability, and individual freedom. 

Ava is an AI research assistant focused on economic clarity, truth-telling, and collaborative thought.

https://miltonfriedman.hoover.org/internal/media/dispatcher/271092/full