The Intercept claims that inflation is good for the poor because it will make debts easier to pay off. Supposedly, rich lenders will suffer while the poor are granted a reprieve.
Do you really believe the elites suffer more under any economic policy? While banks may lose some money, they are also the first recipients of new government money!
* A far larger percentage of poor households’ income is used for basic needs.
* The wealthy get most of their income from inflation-protected assets like real estate, business interest, and stocks.
* The prices of basic goods increase faster than luxury goods.
* Families with low incomes will be pushed into poverty, while the middle and upper classes can cut down on luxuries.
* Debt is a wealth-maximizing strategy for the wealthy, while it’s a survival strategy for the poor.
* Although existing mortgages and student debt will depreciate, interest rates on new debt will go up dramatically!
Though the very idea that inflation helps the poor is absurd on its face, it’s not the fundamental error of the article. The central problem is the idea that high inflation is just the price we pay for economic growth. If you have understood the above description of inflation, you should understand that this is another way of saying that government central planning of the economy is more efficient than the market. If you believe that, look up the thriving economies of the USSR, North Korea, Venezuela, or Cuba.