The Hidden Cost of 'Free' Money

The phrase "you cannot live off the state because the state lives off you" highlights a deeper social consequence. When the government keeps funding social programs by printing money, it causes inflation, which hurts everyone by making goods and services more expensive. Over time, people start to ask: Why should we work so hard when the government just takes it away through taxes and inflation?

This leads to a decline in motivation and productivity. If people feel like their hard work isn’t rewarded, they may stop striving for success because the benefits seem to be eroded by the system. It can create a sense of unfairness, where those who work hard feel like they’re shouldering the burden for everyone else. This can contribute to a phase of social demise—people become less motivated to contribute to society, businesses slow down, innovation declines and overall economic growth weakens

Further, when people start to feel the pinch of rising taxes and inflation, many turn to a cash economy as a way to escape the system. They believe that by working off the books—using cash for services and avoiding taxes—they can keep more of what they earn. On the surface, this might seem like a solution to the problem, but it actually makes things worse.

In a cash economy, the government collects less in taxes because those transactions are hidden. This reduces the funds available for public services like healthcare, education and infrastructure.? As fewer people contribute to the formal economy, the government has to borrow more or print even more money to keep funding these services, which only worsens inflation. This can snowball, creating a sense of every man for himself,further eroding social cohesion and cooperation. The government is forced to stretch its resources even thinner and the same problems—tax burden, inflation and a struggling economy—become even more entrenched. What seems like a personal solution only accelerates the broader social and economic decline.

In the end, the reliance on government support and the turn to a cash economy as an escape only serve to deepen the economic and social crises. Inflation, reduced productivity and a growing sense of unfairness create a feedback loop where fewer people contribute to the formal economy, while more depend on government assistance. This dynamic weakens the very foundation of society, leading to a fragile system stretched too thin to support itself. Without addressing these underlying issues, what begins as a short-term coping mechanism accelerates the inevitable—economic stagnation, social division and the collapse of a sustainable future.

The solution to this issue lies in fostering a balanced approach where individuals and the government work together to strengthen the economy. Instead of relying on endless printing of money and excessive government spending, we need policies that promote sustainable growth, such as reducing unnecessary expenditures, encouraging innovation, and incentivizing productivity.

Tax reforms should focus on fairness, ensuring that everyone contributes without being overburdened, while social services are streamlined to target those who truly need them, without creating dependency. On the individual level, we must shift the mindset from short-term fixes like cash economies to long-term investments in skills, entrepreneurship and community-building, creating a healthier economy where hard work is rewarded and everyone can thrive without inflation eroding their efforts.