A government can reduce the purchasing power of cash too. https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_

A government can reduce the purchasing power of cash too. https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetisation https://en.wikipedia.org/wiki/2016_Indian_banknote_demonetis... Or just issuing new money at a rate that exceeds demand for the money (meaning the relative desirability of the money, which relates to the trustworthiness of the community using the money and the economic productivity of the community using the money). Like when the population pyramid starts turning upside down and the benefits promised to older people need to come into fruition from a smaller and smaller labor supply. Edit to respond to 4bpp: > With cash, they can only do it to everybody at once or not at all. I think government can use the new money to inflate the price of certain things quicker than others, effectively advantaging certain portions of the population, which is what I allude to in my 3rd paragraph. For example, inflating asset prices lets those who own more assets (or certain assets) lose purchasing power more slowly than those who do not (see most labor sellers). This is a somewhat related example of how a policy change for all can be designed to affect certain populations differently: https://www.brookings.edu/articles/the-hutchins-center-explains-the-chained-cpi/ https://www.brookings.edu/articles/the-hutchins-center-expla... Use lower CPI to update tax brackets, and higher CPI to calculate Social Security benefits, i.e. increasing wealth redistribution from young to old without explicitly saying it.