Re:Why inflation is not a threat
by brippalcharrid on Monday March 15, 2021 @09:50AM
(#26466070)
To a certain (limited to moderate) extent it does work, though, and this directly influences how much governments borrow in the present day. If long-term expectations for rates of inflation were zero or negative then governments would tend to decrease their borrowing over time, all other things being equal.
This doesn't really work because when inflation goes up, so do interest rates. Inflation was rampant in the 70s, but so were the interest rates, so there isn't any free lunch here.