Nobody owes more money than the rich. This is true of countries as well.
“Wealth” as most people think of it comes from power over money more than from the absolute value of net worth.
I had a lot of credit card debt in University. I was the richest person my friends knew. That money gave me access to people and opportunities I would not have had otherwise. Today, I owe a million dollars ( mostly mortgage ) but am considered quite well off I think. Don’t get me wrong, I am far from wealthy but I am probably the “richest” person in my family.
In University I used to joke that if you gave $50,000 to a penniless man with nothing, he would have $50,000 ( be doing pretty well ) whereas if you gave it to me I would be broke and it would not change my life at all. Today, I guess it would be several hundred thousand instead but otherwise still totally true.
If your average Latin American country was able to borrow as much per person as the US owes, they could build roads and factories and hospitals and universities and chip foundries and be instantly wealthy. The only problem is who is going to lend it to them?
I think you're mistaking wealth with purchase of luxury goods. If someone has no money, and borrows to buy a fancy set of clothes they might be perceived as wealthy by onlookers but they still have no money. Worse, even, as the interest on that loan will make them even poorer to the point of having a negative net worth. If you owe more than you own, you are not wealthy as you have negative net worth. Inflation someone in your situation precisely because they aren't actually wealthy: they owe more than they own.
This is exactly my point: someone who borrowed money for, say, university or to buy a house or a car is helped by inflation. By comparison wealthier people who are more likely to have bought those assets outright, are not. And the wealthiest people who are - directly or indirectly - the ones lending out money to other people see their wealth transferred to the first group.
Some debtors and people who own hard assets benefit from inflation.
People with more ephemeral assets and in service business are harmed by inflation. The service sectors in particular are full of low quality, debt-laden companies who can’t withstand interest driven financial stress.
“Wealth” as most people think of it comes from power over money more than from the absolute value of net worth.
I had a lot of credit card debt in University. I was the richest person my friends knew. That money gave me access to people and opportunities I would not have had otherwise. Today, I owe a million dollars ( mostly mortgage ) but am considered quite well off I think. Don’t get me wrong, I am far from wealthy but I am probably the “richest” person in my family.
In University I used to joke that if you gave $50,000 to a penniless man with nothing, he would have $50,000 ( be doing pretty well ) whereas if you gave it to me I would be broke and it would not change my life at all. Today, I guess it would be several hundred thousand instead but otherwise still totally true.
If your average Latin American country was able to borrow as much per person as the US owes, they could build roads and factories and hospitals and universities and chip foundries and be instantly wealthy. The only problem is who is going to lend it to them?
Wealth is not what we think it is.