> extremely regressive

Wouldn't call it extremely regressive.

> The poorer someone is, the more of their assets are likely to just be some cash in the bank.

The poor generally have less cash in the bank than the rich.

> - it is a permanent loss of quality of life for people on fixed incomes.

Those living of fixed incomes are rarely the poorest, either. Pensions in many countries are tied to inflation.

> This is the justification for nearly every government action.

Yes, and in many many cases, that justification is entirely justified. Where it isn't, the problem typically is bad government, not government.