I encourage people interested in this topic to read up on the Fiscal Theory of the Price Level. I flippantly refer to it as "MMT without the magic". But it really did a good job of explaining our current situation.

When you have a long-term fixed rate mortgage, only some of the value is paid off by principal payments. The rest is being paid off naturally by inflation. Imagine paying off a mortgage made in 2003 dollars with dollars you made in 2023. The payment is the same, but only a pittance of the same value.

The theory goes that inflation is not completely a result of monetary policy - there is also a market adjustment of the dollar to the amount of government debt issued. To oversimplify, government debt will be paid back - if not through taxes, then through inflation.

The implication is that MMT gets it partially right - worrying about debt to GDP is somewhat irrelevant. And if it can issue debt at less than the rate of inflation, the government can get free money! But we are clearly well past that point.

The silver lining is that default is not really a risk here (maybe a political one) - inflation will cap out whenever the value of the money "catches up" with the debt level. (That said, if we continue to add to the debt, that means inflation will never stop).