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I'm curious to see how well the enormous mortgage and student loan debt owed by americans will curb inflation. Even if $300,000 dollars hypothetically couldn't

I'm curious to see how well the enormous mortgage and student loan debt owed by americans will curb inflation. Even if $300,000 dollars hypothetically couldn't buy a loaf of bread in ten years time, it could still pay off my house, and so would be pretty valuable to me.

tastyfreeze 5y ago
Inflation will only help you pay off your house if you have assets that you can sell for inflated dollars or your salary increases with inflation. Otherwise, you are only going to become poor and probably default on your loan as more of you income is consumed to keep you alive.
colordrops 5y ago
Except for the "American Inflation Mortgage Adjustment Act" that will be passed to allow lenders to increase mortgages to adjust for inflation. Probably pushed by the same people that passed the Sonny Bono Copyright Term Extension Act.
- TaylorAlexander 5y ago
  And yet they don’t want to raise minimum wage to track inflation...
- milkytron 5y ago
  > American Inflation Mortgage Adjustment Act Do you have a source for this? I've never heard of it.
  - colordrops 5y ago
    I'm being sarcastic.
    - deepserket 5y ago
      just wait till 2023
playingchanges 5y ago
This is exactly the reason the fed is ok with current inflation readings. Huge debt bubble in the American middle and working class, along with a low growth economy. The only way to get rid of the debt currently is to inflate it away.
- guessbest 5y ago
  It won't happen because banks own that debt, and they don't want those assets to get inflated away.
  - meowster 5y ago
    I've heard that such debt contracts have been retroactively-changed to be paid in gold instead of the hyper-inflated currency. I cannot find evidence to backup such claims, has anyone else heard of this or have an expample? And like another user suggested, what's to prevent the government from passing a law that changes debt contracts?
    - guessbest 5y ago
      >And like another user suggested, what's to prevent the government from passing a law that changes debt contracts? In the USA it will be lobbyists.
      - pbak 5y ago
        So they will not "prevent" the government, they will cajole and corrupt people in the legislative and executive branches so it doesn't get changed.
        mandelbrotwurst 5y ago
        Prevention doesn’t imply anything about its means.
jganetsk 5y ago
I'm always surprised when people assume that inflation implies that wages will rise commensurately.

tastyfreeze 5y ago

Inflation will only help you pay off your house if you have assets that you can sell for inflated dollars or your salary increases with inflation. Otherwise, you are only going to become poor and probably default on your loan as more of you income is consumed to keep you alive.

colordrops 5y ago

Except for the "American Inflation Mortgage Adjustment Act" that will be passed to allow lenders to increase mortgages to adjust for inflation. Probably pushed by the same people that passed the Sonny Bono Copyright Term Extension Act.

TaylorAlexander 5y ago
And yet they don’t want to raise minimum wage to track inflation...
milkytron 5y ago
> American Inflation Mortgage Adjustment Act Do you have a source for this? I've never heard of it.
- colordrops 5y ago
  I'm being sarcastic.
  - deepserket 5y ago
    just wait till 2023

playingchanges 5y ago

This is exactly the reason the fed is ok with current inflation readings. Huge debt bubble in the American middle and working class, along with a low growth economy. The only way to get rid of the debt currently is to inflate it away.

guessbest 5y ago
It won't happen because banks own that debt, and they don't want those assets to get inflated away.
- meowster 5y ago
  I've heard that such debt contracts have been retroactively-changed to be paid in gold instead of the hyper-inflated currency. I cannot find evidence to backup such claims, has anyone else heard of this or have an expample? And like another user suggested, what's to prevent the government from passing a law that changes debt contracts?
  - guessbest 5y ago
    >And like another user suggested, what's to prevent the government from passing a law that changes debt contracts? In the USA it will be lobbyists.
    - pbak 5y ago
      So they will not "prevent" the government, they will cajole and corrupt people in the legislative and executive branches so it doesn't get changed.
      - mandelbrotwurst 5y ago
        Prevention doesn’t imply anything about its means.

jganetsk 5y ago

I'm always surprised when people assume that inflation implies that wages will rise commensurately.