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And the real value of debts fall, including student loan debt, housing debt and even consumer credit. I think we're going to hit a wall soon where we either ne

And the real value of debts fall, including student loan debt, housing debt and even consumer credit. I think we're going to hit a wall soon where we either need to forgive or inflate debts away. The alternative is likely to be a crushing depression and fiscal austerity that is much less than any of the downsides of inflation. If you're a largely debt free upper-mid to upper class tech person then the your personal viewpoint will be that inflation is all bad with no upside, because you have no crushing debts and you just think everyone should pay their debts and its a moral problem. Economically in the broad economy, though, your businesses are likely to be crippled by debt deflation when it really hits the bulk of the population.

jibe 5y ago
The lowest poorest 20% have the highest credit card debt to income ration (almost 25%). Inflation will crush them. Cost of debt will go up, cost of living will go up. Inflation is the worst for poor people.
jbay808 5y ago
Housing debt is mainly held by the wealthier half of society. Credit card interest rates, as well as other unsecured consumer lines of credit, are so incredibly high that inflation is far from reducing the value of those debts, it merely slightly slows their rate of growth. If you think inflation's impact on debt favours the poor, you have to look at the interest rates available for borrowing. Poor people get loans without collateral, so their interest rates price in inflation and then some. Wealthy people get collateralized loans at interest rates below inflation -- for an extreme example, look at how billionaires borrow against their stock holdings rather than sell stocks for cash.
- lamontcg 5y ago
  I never mentioned the poor. I'm considering mostly the bulk of middle-class Millennials who went to college with crushing student loan debt who can't save up enough to buy a house.
int_19h 5y ago
Periodic forgiveness of debts was fairly common in ancient societies - that's what the Jubilee originally was about, for example - so there's certainly precedent for it.

jibe 5y ago

The lowest poorest 20% have the highest credit card debt to income ration (almost 25%). Inflation will crush them. Cost of debt will go up, cost of living will go up. Inflation is the worst for poor people.

jbay808 5y ago

Housing debt is mainly held by the wealthier half of society. Credit card interest rates, as well as other unsecured consumer lines of credit, are so incredibly high that inflation is far from reducing the value of those debts, it merely slightly slows their rate of growth. If you think inflation's impact on debt favours the poor, you have to look at the interest rates available for borrowing. Poor people get loans without collateral, so their interest rates price in inflation and then some. Wealthy people get collateralized loans at interest rates below inflation -- for an extreme example, look at how billionaires borrow against their stock holdings rather than sell stocks for cash.

lamontcg 5y ago
I never mentioned the poor. I'm considering mostly the bulk of middle-class Millennials who went to college with crushing student loan debt who can't save up enough to buy a house.

int_19h 5y ago

Periodic forgiveness of debts was fairly common in ancient societies - that's what the Jubilee originally was about, for example - so there's certainly precedent for it.