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Fed policy is explicitly controlled inflation (2% target).

2% inflation isn't going to inflate away the debt any time soon. It's basically as close to zero as can be realized without going under.

It is not in fact close to zero, it is significant inflation, particularly as they tend to float over the target (3-4%).

At 2% over just 25 years money loses 60% of its value. That is not insignificant, and of course with higher rates it loses value quicker.