Q: “So why is everyone so opposed to inflation? Don’t they realize that inflatio

Q: “So why is everyone so opposed to inflation? Don’t they realize that inflation reduces debt in real terms?”

This is why people are opposed to inflation:

1) Moral hazard – punishes people who save and live within their means

2) Fixed Income Punishment – Harms those on fixed incomes who are impoverished by inflation.

3) Business Risk Taking Impediments – planning becomes difficult because of price variability (this can be good and bad).

4) Interest Rate Peaks – barrier to rates. Effectively inflation helps big companies with fixed capital costs, and hurts small businesses who need cheap access to capital. This is why Paul Krugman’s chart was effective in 1935 and is ineffective today.