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That's what inflation is, after all. Consider two scenarios:

  1. You have $1,000 in the bank and the government takes $85 as tax, leaving you with $915.
  2. You have $1,000 in the bank and the government prints $85, making your $1,000 worth $915.

Using #2 is a little more sneaky because people don't make the direct connection, but the effect is identical.

That's what inflation is, after all. Consider two scenarios: 1. You have $1,000 in the bank and the government takes $85 as tax, leaving you with $915. 2. You have $1,000 in the bank and the government prints $85, making your $1,000 worth $915. Using #2 is a little more sneaky because people don't make the direct connection, but the effect is identical.

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No. Doesn't work like that. To figure out the value of your $1000 in that scenario you need the total amount of dollars before the new printing and the total number of dollars after.

In our example there are $1,000 in circulation. Printing $85 actually reduces the value of each dollar by only 7.8%, so the Fed can play the game a little more in reality. They can print $93 to have the same effect as taxing you $85 (remember their newly minted dollars are worth less, too).