Re: inflation
You have the same amount of money but things cost more so you get less for your dollar.
No, you don't have the same amount of money. You have the same physical representation of money that you had before (eg. five dollar bills), but since each dollar bill is now worth 80 cents, the five dollar bills in your hand now correspond to the same real-world value that four dollar bills used to correspond to.
things cost more
They don't cost more. They cost the same. But the dollar bills are now only worth 80% of what they used to be worth. The real-world value of "things" remains real. It's the nominal value we apply to the physical representation of money that changes. That's because money itself isn't real. It's just an imperfect attempt to represent real-world value in physical (and electronic) form.
Staples like bread, milk, eggs etc. don't get more expensive over time. Instead, the physical representation of money corresponds to less and less real-world value.
it's like a new tax.
Inflation is worse than tax. We get things in return for the tax we pay. We don't get anything when the paper notes in our hand aren't worth the same amount of real-world value they used to physically represent.
Also worth bearing in mind: ultimately inflation is something for macro-economists to worry about. As individuals we need only worry about our
personal cost of living. If, for example, we decide to drink tap water instead of bottled water and buy e-books instead of paperbacks then, when inflation raises the shelf-price of bottled water and paperbacks, our personal costs remain unaffected.
