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When a government spends money, there are only three places that money could have come from:

1. Taxation — by taking the money away from someone.
2. Borrowing — by temporarily taking the money away from someone, with a promise of returning it at a higher value.
3. Inflating — by printing money, which reduces the value of all the other money that people hold.

Of these, the last is the most regressive and pernicious. Not only does it reduce the savings of the middle class, but it also causes people to think they have more money than they really have.

Which one, do you suppose, do politicians choose most often? Right: inflating and borrowing. That’s because taxpayers feel the pain of taxation most directly.