Sample Solution

John Maynard Keynes, a renowned British economist, argued that governments are often responsible for inflation and its worst ravages. According to Keynes, “Governments can always choose between printing money and raising taxes… Governments inflating the currency suffer no disadvantage so long as they have the power to do so” (Keynes). This means that when governments print more money than their current economic output warrants it can lead to an increase in prices (inflation). Since this additional money is not backed by any extra goods or services produced, it depletes its value which causes prices of commodities to soar.

What follows from this is a decrease in purchasing power as wages fail to keep up with rising costs of living. As a result, people experience severe financial hardship due to reduced standards of living and increased debt levels. Additionally, inflation tends to disproportionately hurt those on fixed incomes such as retirees or individuals relying on government assistance. Moreover, businesses are also adversely affected by increasing production costs caused by rising material expenses – leading them towards bankruptcy if they cannot keep up with demand.

In conclusion, it is clear that while governments may resort to printing excess money in order maintain certain policies or objectives; doing so without careful consideration can have dire consequences including rampant inflation and its subsequent effects on society – something which was noted by John Maynard Keynes many decades ago.