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The concept of "inflating debt away" is an assumption that wages match inflation while debt stays static. This is a fair assumption in low inflation times, but
by ljhsiung 4y ago
The concept of "inflating debt away" is an assumption that wages match inflation while debt stays static. This is a fair assumption in low inflation times, but is showing some cracks these days.
One might then ask, do higher-class wages match/exceed inflation more than lower-class wages? This is debatable. But here's some interesting data from the Atlanta FED, where you can track wages by quintile, education, "skill", hourly vs. non-hourly, etc. Make your own conclusions.
[1] https://www.atlantafed.org/chcs/wage-growth-tracker https://www.atlantafed.org/chcs/wage-growth-tracker
- susanasj 4y agoyes this this a good point, and also a useful chart for contexualizing this move.
- atweiden 4y ago> The concept of "inflating debt away" is an assumption that wages match inflation while debt stays static It also myopically focuses on household debt. But household debt is significantly lower than either corporate debt or government debt [1]. The biggest debtors benefit the most from inflation — quantitatively speaking, the debts of ordinary people aren’t very big. [1]: https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/A%20decade%20after%20the%20global%20financial%20crisis%20What%20has%20and%20hasnt%20changed/MGI-Briefing-A-decade-after-the-global-financial-crisis-What-has-and-hasnt-changed.ashx https://www.mckinsey.com/~/media/McKinsey/Industries/Financi...