Suppose inflation rate went up higher than what people are expecting,how would it help or hurt the government?

Answer 1

This is a common economic cycle and helps some and hurts others.

In German before WWII there was a devistating inflation period. German's were facing 1000% inflation increase per day; Example: Price for loaf of bread was 100 and the next day for the same loaf of bread was 100,000. Yikes. The German government was printing money and fueling the inflation. The result was poverty to the German people; and the rise of Hitler.

Another example is in the late 1970's. The USA economy experienced "Stagflation" where we had major increase in the price of goods and services and payed workers less. Result - S&L (Savings & Loan) debacle. Banks got hurt - those with fixed rate mortgages benefited - home owners lost equity - the government had to buy lots of property - and people without loans for homes and small business couldn't get loans.

Answer 2

Inflations (average is about 3%) so it happens all the time during the business cycle

if it his around lets say 100%, (which is called hyperinflation) then it would hurt our government in many ways. let us assume the government has 2 billion dollars, before inflation kicks in lets say that they can buy 2 Jets. after the 100% inflation kicks in they can only buy 1 jet. after another 100% inflation they can buy 1/2 a jet with the same 2 billion dollars. so inflation is a way of the government losing spending power

the only way i can see it helping the government is that when the government issues bonds. lets say you buy a bond from the U.S government for $50. the government promises you to pay you back $100 in 2 years. before inflation that $50 you can buy a 50 sodas. one year passes and 100% inflation takes place, now $50 buys you 25 sodas. another year takes place and $50 buys your 12.5 sodas. then the government pays you your $100

the government is happy because they used your $50 to buy 50 sodas, and paid you back the $100 that could buy you only $25 sodas.

Answer 3

it is authentic, we singaporean plebians have little or no administration over our politics, regulations nor political masters. We merely follow the government.s judgements. It cultivates us into very repressed, apathetic yet very adaptable bunch. this might clarify the increasing attrition value of properly-knowledgeable Singaporeans searching for greener pastures someplace else.

Answer 4

It would only hurt the govt, in that is would cost them votes.

But otherwise I don't think Pollies care. They are alright with their lovely homes, expense accounts, free transport and trips abroad,