It is no secret that progressives in the United States have been advocating for policies that prioritize the working class and help narrow the wealth gap – from raising the minimum wage to expanding access to healthcare. However, one policy that they should consider promoting is the implementation of higher inflation rates. While inflation is often thought of as a negative phenomenon, when used in conjunction with reducing the value of student loans and mortgages, it can benefit the working class.
Inflation is the rate at which the general level of prices for goods and services rises. While on the surface level this might appear to be a bad thing, in reality it can be used to reduce the burden on students and homeowners. As inflation rates increase over time, the value of traditional debts like student loans and mortgages decreases. This means that borrowers will owe less money in real terms and be able to pay their debts off more easily. In fact, this is a policy that already exists in countries like Japan, where the government has implemented a plan to increase inflation rates and reduce the value of outstanding debts.
One of the main beneficiaries of policies like these are recent college graduates, who are often saddled with massive amounts of student loan debt. These debts can hold them back from major life decisions such as buying a home, starting a family, or even just making ends meet. By reducing the value of their debts, inflation rates can provide relief and allow them to start building their lives without worrying too much about their financial burdens.
Additionally, homeowners can also benefit from higher inflation rates. Many Americans are currently struggling with mortgage debt, which keeps them tied to their current jobs and locations. By reducing the value of mortgage debts, homeowners will be able to sell their properties and move around more freely. They can buy better homes, live in safer neighborhoods, and improve their quality of life overall. Overall, this can help to create more equitable and resilient communities.
Critics may argue that higher inflation rates carry their own costs, such as reduced purchasing power and higher costs of living. However, as outlined above, the benefits of using inflation rates to reduce the burden of student and mortgage loans outweigh the short-term costs of inflation. By reducing debt in real terms, progressives can help level the playing field and create a more equitable society.
In conclusion, implementing policies that allow for increased inflation rates can be a winning strategy for progressives. By reducing the value of student and mortgage debt, this strategy can provide much-needed relief to working-class Americans and allow them to build better lives. It is a policy that countries like Japan have implemented successfully, and it is time for America to follow suit and use this tool to create a more fair and just society.