Debt and Inflation

Phillip Yarbrough’s dire account of our national debt buildup (letter, Feb. 11) omitted one important dimension of the problem: The effect of inflation on the debt. Assuming an average inflation rate of around 4%, the money GNP (the price level) from inflation alone will at least double by 2020. This means that the current holders of government bonds will be paid in 50-cent dollars. Put another way, the bondholders are paying an indirect “tax” of around $160 billion, which is probably the only debt-reducing tax we are apt to get. The burden of the debt on future generations is grim enough, but inflation makes the bite a tad easier to bear. HOWARD F. SMITH Morro Bay