...When the federal reserve increases the supply of money, inflation is the net result. The net result of the fed increasing the money supply and inflation, is a tax on everyone who currently owns US dollars, as each of their dollars now purchases fewer real goods
Not exactly. The (money supply) times (velocity of money) equals (cost of goods), times (production rate).
So, if the amount of money increases but velocity of money and the production rate (amount of goods produced per unit time) stay the same, the result is inflation.
However, conversely, if the production rate increases but the money supply and velocity of money does not, then the cost of goods decreases-- that's deflation. (Note that this is production rate, not productivity: production rate equals productivity time population times employment fraction.)
A steady economy is one in which the money supply increases exactly at a rate equal to the production rate-- in this case, the cost of goods stays constant (assuming that the velocity of money doesn't change).
Very good, but our situation is a little more complex. Our money supply has been increasing so quickly that the government stopped publishing the numbers about a decade ago! Inflation on consumer goods has not kept pace as one would expect from these equations. There is a really good reason for this. The new money enters the economy via the financial sector, through the huge bailouts, the quantitative easing, and the purchasing of "troubled equities." That money has never actually entered the consumer economy. It has just been recycled in the financial economy. The only money that entered the real goods economy was through the stimulus which was tiny in comparison to all the other money injected into the economy. That is why the stock and derivatives markets have soared while wages have stagnated. That's why there is something like 50 times more value in total derivatives trades per year than the world GDP. There has been huge inflation in that sector, which in the absence of comparable inflation in the consumer economy, has enriched the participants in the stock and derivatives market at the expense of the rest of humanity.