Why if I have $100 right now, 10 years later that same $100 will have less purchasing power? Why can’t our money retain its value over time, I’ve earned it but why does the value of my time and effort go down over time?
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You have it right, money is more valuable now than later.
It is designed that way because it is designed to be spent. The purpose of money is for it to be spent, and to facilitate transactions. If you holding onto it and not spending it, its not doing its job. Therefore money and currencies are designed to have inflation so that it gets spent as soon as possible.
If you don’t want to spend your money and want to save it for later, this is very bad for the makers of a currency. What they would rather have you do is give the money back, and they will use it and then pay you back later – they will even pay you extra to do this. This is what bonds are, and the extra they pay back is the interest on a bond.
That is why money is designed to inflate. Inflation is achieved by printing more of it over time and it is managed by changing the interest rates on bonds.
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