The estimated impact of inflation on today's debt/GDP ratio is larger than in the mid-1970s but not as large as in the mid-1940s. If inflation were 5% higher, the debt/GDP ratio would be about 20% lower, a debt ratio of 43.4% instead of 53.8%.
...Today, a much greater share of the public debt is held by foreign creditors - 48% instead of zero. This large foreign share increases the temptation to inflate away some of the debt. Another important difference is that today's debt maturity is less than half what it was in 1946 -3.9 years instead of 9. Shorter maturities reduce the temptation to inflate. These two competing factors appear to offset each other
Pointer from Tim Harford on Twitter. Read the whole thing. Some other points to consider:
1. We cannot inflate away the long-term problem posed by future Medicare and Social Security obligations that exceed future expected tax collections.
2. We do not know what the costs are of becoming a "serial defaulter." Suppose we get away with inflating away a big chunk of our debt this time. What will that do to the willingness of investors, particularly foreign investors, to finance future borrowing?