If I have a debt at an interest rate of 4% and inflation is 5% my debt is worth less every year relative to the value of other things. If I have a debt at an in

If I have a debt at an interest rate of 4% and inflation is 5% my debt is worth less every year relative to the value of other things. If I have a debt at an interest rate of 5% and inflation is 2.5% the value of the debt is increasing. This effect is increased if only interest is being paid and the asset the debt is for does not increase in value (like a car). Add to this that wages are relatively stagnant for most people outside of tech since the 80s in some countries and you have a problem. It can get even worse where wages are kept stagnant by government intervention and inflation goes up faster than 5%.