"Deficit Financing" and Inflation

Now what does this mean? Deficits! This means that the government spends more than it collects in taxes and in borrowing from the people; it means government spending for all those purposes for which the government wants to spend.

If the government wants to pay out more money than before, if it wants to buy more commodities for some purpose or to raise the salaries of government employees, no other way is open to it under normal conditions than to collect more taxes and use this increased income to pay for the higher wages of its employees.

If the government complains about the fact that prices are going up and appoints committees of learned men to fight against the inflation, we have only to say, "Nobody other than you, the government, brings about inflation, you know."

The government does not speak of the increase in the quantity of money as "Inflation;" it calls the fact that commodity prices are going up "Inflation." The government then asks who is responsible for this "Inflation," that is, for the higher prices? The answer - "Bad" people; they may not know why prices are going up but nevertheless they are sinning by asking for higher prices.

The government does not acknowledge this; it does not say, "We have increased the quantity of money and prices are going up." The government starts by saying, "Prices are going up. Why? Because people are bad. It is the duty of the government to prevent bad people from bringing about this upward movement of prices, this inflation. Who can do this? The government!".

Then the government says, "We will prevent profiteering, and all these things. These people, the profiteers, are the ones who are making inflation; they are asking higher prices." And the government elaborates "Guidelines" for those who do not wish to be in the wrong with the government.

The worst failures of money, the worst things done to money, were not done by criminals but by governments, which very often ought to be considered, by and large, as ignoramuses but not as criminals.

https://mises.org/library/deficit-financing-and-inflation