Inflation helps borrowers because the borrower owes the same amount of money it borrowed but if the prices of everything else goes up including wages or taxes you get to pay it back cheaper! If you are the Federal Government and want to pay off the debt cheaper you can raise taxes and also wait for wages to rise therefore more taxes…. then they have more money in the coffers to pay off the debt. Think of the US Federal Government as a giant borrower.

For the public we have actually seen a fall in wages of 2.2% for May when adjusted for inflation. The average weekly wage for the US is $1018.00 a week according to the latest Bureau of Labor Report.