"I would have thought that a rise in the inflation rate would lower the real value of that debt (over time) making the debt burden less serious"
sextoy, you may be right. but basic economics suggests that a high inflation rate equates to monetary tightening, thus the debt situation becomes worse. The only way debt can be managed to appropriate levels is by capital markets create a vibrant persona whereby the nasdaq trades above 5000+ in other words, not in this decade. Inflation will increase debt, as interest rates rise, higher unemployment rate, an overall pricy economy with low consumer expenditure in conjuction with consumer and business loan defaults etc.
