A question from Yahoo! Answers:
Inflation Helps the Rich?
This question is for the people who have read the book “Poor Dad, Rich Dad,” by Robert Kiyosaki.
In his book, he states that inflation actually benefits the rich while making the poor even more poor. How is this so when inflation makes money worth less?
Whenever Robert Kiyosaki says anything, you’d be well advised to assume it’s not true. Inflation does not benefit the rich; in fact, serious economists have long known that inflation and wealth concentration are inversely related. Inflation benefits the government at the expense of the private sector. Here’s how Keynes once put it:
By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat.
Additionally, inflation devalues interest income more drastically than wage income.