From a let's say personal pov, let's say I have a mortgage and student loans and those are my only debts and their interest rate is fixed. If inflation is indeed rampant but wages track inflation (I assume) - isn't this an effective debt reduction as long as you don't incur new debt? Or do the down sides of inflation outweigh any of the benefits I assumed above?
The concern comes in when your cash compensation doesn't keep pace with inflation and your effective buying power decreases. Also other general macro effects that may indirectly impact you, and I'm sure there's a whole lot more to it than that, but yeah simplistically: inflation make debt go bye bye.
The biggest winners during high inflation periods are those holding the largest debts.
There's no direct mechanism that ratchets wages as a result of inflation.
Average wages increase when the labour market is tight and there is demand for workers. However that generally applies to new applicants, not people in existing posts. For them, static wages lead to purchasing-power reduction.
That's right, debt gets inflated away.