Inflation erodes the real value of debt, making fixed-rate mortgages cheaper to repay over time. A landlord owing $1 million on mortgages will repay it with dollars worth less, while tenants cover the payments. The same logic applies to government debt.
Everybody's sort of accepted that we're going to have inflation as the normal state of affairs, because it's been going on for decades and decades. You get the value of borrowing at today's dollars, but you get to pay back the debt in cheaper dollars over time, because inflation basically debases the debt. And with income property, we don't even pay our own debts. Our tenants pay our debts for us. So imagine that if you have a million dollars in mortgages, say you own three or four single family homes, and that totals a million dollars worth of mortgage debt. And you look at today and it says $1 million. That's how much you owe. And then you go five years, 10 years into the future, and that million dollars will be worth a lot less. So you progressively pay it back in depreciated dollars. It's a very good deal. And this is the exact same deal that our government engages in.
