If inflation is a bad thing, why is government policy designed to make us want more of it?

Britain is awash with debt, while government policy encourages inflation. But theoretical inflation sorts a lot of stuff out, while actual inflation will hurt.

So, you want to buy your first house. Let's assume (I know, I know, cloud cuckoo land, but let's go with it) you've scraped together a deposit and have persuaded someone to give you a mortgage. You'll be borrowing, on average, around £117,000. Oh, but that's assuming you're not in London. If you are, you're looking at more like £193,000 instead.

You've probably got some other debt outstanding too; most of us have. Last May, the average consumer borrowing - credit cards, overdrafts, car loans and so on - stood at around £3,207. That's an average, mind, so for a lot of us it's a lot more. Oh, and it had, by June, risen - only by £4, admittedly, but still, every little hurts.

Then there are student loans. In 2011, the Push university guide reckoned these averaged out at around £5,680 per student per year. That was before the new tuition fee regime, of course, and now you're probably looking at somewhere closer to £12,000 to cover fees plus maintenance. The resulting hole in your finances isn't really debt - even the government doesn't expect most of it to be paid back - but is more like an extra tax levied on those foolish enough to be born after 1993 (serves ‘em right). Nonetheless, it does mean yet another big red stain on the finances of those starting out in life.

The point, in case it's not quite sledgehammer enough for you, is that Britain is awash with debt - and the younger you are, the more likely you are to be drowning in it. Coalition ministers have spent a lot of time talking about how immoral it is to run up the nation's credit card and leave our children to pay it off. But they've seemed surprisingly blasé about running up our children's actual credit cards, and have cheerfully gone around loading them up with tuition fees and inflating the housing bubble all over again. Reports from the Office of Budget Responsibility, indeed, have been pretty explicit in their expectation that cuts to the deficit would be matched by a vast increase in personal debt.

All this is obviously horrible for those who'll have to pay those debts. But I wonder if it could have a more profound effect on the nation's attitude to its finances.

We're still living in an economic consensus defined, broadly, by the Thatcher government. For much of the seventies, inflation had run at over 10 per cent, which was commonly thought A Bad Thing. Thatcher's economic policies - monetarism, deindustrialisation, a strong pound - were all intended to get inflation down to the sort of level which didn't scare the bejesus out of investors, and keeping inflation low has been one of the main goals of policy ever since.

Now, though, a large and growing chunk of the population would, in the long term, do quite nicely out of spot of inflation. More than that, they're relying on it: some of the mortgages handed out over the last decade haven't got a hope of being repaid unless nominal wages start to spiral.

Think this through for a moment. If you woke up tomorrow to find that wages and prices had both doubled overnight, then the value of whatever debt you're sitting on has effectively halved. More than that, though, the value of the debt the government is sitting on has halved, too. Oh, and with a cheaper pound, suddenly Britain's exports look more competitive too. Halve the value of money in this country, and a lot of our problems suddenly look soluble. (This is economic model that used to work so well for Italy.)

The real world is not so kind, of course, and real inflation would be a lot more painful than that. Interest rates would rise. Holidays would become more expensive. The five or six British people still sitting on savings would see them whittled away, and anyone about to retire gets shafted.

Worst of all, wages are extremely unlikely to move in lockstep with prices, and those that lag most would likely be the ones paid to those with least bargaining power. That means, in all probability, the poorest. Those same people are also the least likely to benefit from an increase in asset prices (houses again, mostly) that'll accompany any inflation.

Oh, and there's the tiny problem that the deficit means we're still dependent on the faith and credit of the international bond markets. Theoretical inflation sorts a lot of stuff out. Actual inflation will hurt.

Nonetheless, though you'll never catch them saying it out loud, this seems to be the plan the government have lumped for. To get out of the mess we're currently in, there are only really three options. One is a sustained and historic boom (unlikely). Another is default (horrible). The third is to try to inflate the debt away and hope nobody notices. If you're young, middle class and sitting on a massive mortgage, this works in your favour. If you're an investor, a pensioner, or, worst of all, poor, it doesn't.

All the reasons inflation was bad in the Seventies still apply. There are many good reasons for wanting to keep it down. But we can't have everything. The larger the share of the population that is sitting on unsustainable debts, the less frightened of inflation the electorate will become. Any monetarist baby boomers out there might want to think about that, next time they're talking gleefully about how much their house is worth.

A boy with a kite made of banknotes in Germany during the depression of 1922 when escalating inflation rendered much of the currency worthless. Photo: Getty

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. He is on Twitter, almost continously, as @JonnElledge.

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Piers Morgan struggles with the idea that anyone might ever refuse an opportunity to go on television

The Good Morning Britain host has contradictory beef with Ewan McGregor.

Has it been a while since you heard what Piers Morgan thinks? Are you shaking from withdrawal, refreshing your Twitter feed, unsure whether Kanye is or isn’t a narcissist? Well, fear not, the Mole has a fresh fix for you. After Ewan McGregor dropped out of appearing on Good Morning Britain today, a new take was born. Actors’ opinions are stupid, but also, actors should come on Piers Morgan's show and talk about their not-important views.

McGregor, who was meant to be promoting Trainspotting T2 on the show, tweeted this morning he had cancelled because of Piers’ (obviously half-baked) opinions on the Women’s March. “Was going on Good Morning Britain, didn't realise @piersmorgan was host,” McGregor wrote. “Won't go on with him after his comments about #WomensMarch.”

What truthbomb had Piers dropped to provoke this? That it was unfair women were protesting and where was the MEN'S march. A march for men! As if running our parliament, corporate system, legal industry and creative sector isn’t enough! They should probably all do a walk too! Poor men. No wonder the patriarchy is on its last legs. They must be so weary.

Still, hats off to Piers Morgan. It takes a real personal flexibility to maintain the title of Contrarian Extraordinaire of the Our Glorious Nation. By which we mean that Piers Morgan will think literally anything, if the money is right. Whether it’s writing that Kim Kardashian is so awful she caused someone to have a stroke, or that he loves her for being herself, the man is so darn unpredictable. 

Morgan accused McGregor of being "just an actor", and that he should be “big enough to allow people different political opinions”. Once again, he asked the age-old question: are you an enemy of free speech if you won't go on someone’s early morning television show? This might be alien to Piers, but people don't have to go on television if they don't want to. 

And what if Ewan had appeared on the show chatting about his film? “Happy to appear on my show for your film, but not happy with my opinions? Classic money-driven actor,” the inevitable Morgan tweet would have read. It's quite easy, this Piers Morgan lark. No, it isn't. Yes it is. Cheque please! 

I'm a mole, innit.