Look at the blue line for 2021. That is median household income adjusted for inflation. It has risen in 2021. https://seekingalpha.com/article/4478222-median-household-income-november-2021
And in the December job report from the Dept of Labor there was a good jump in wages, more than inflation. Before December I had read that median wage and salary, for one worker, not a household, was up 4.8% while inflation was 6%. So I guess full year will be 5% wage hikes compared to 6% inflation. How much do we spend? Assume after tax income for one person is $100,000. Do we spend $95,000? Ok spending is up $5700. Wages rose $5000. The one person is down $700. But if he has a mortgage of $100,000 then the inflation adjusted debt has been reduced by inflation to about $95,000. Cash flow down $700 but “real” debt, debt adjusted for inflation is down $5000. That person has won from inflation. He is $4300 better off at the end of the year. I remember inflation in the bad old days. I had a CFO client who paid $30 million dollars estimated tax payment when we told him to pay $3 million. I called him and he said “Oh, did I make a mistake? Let me get this right. The IRS (under the law then in effect) has to pay me 27 million plus 13% annual interest on the 27 million, right? “ inflation had declined substantially in the previous year but the IRS, the safest payer in the world being the US government, had to pay interest on tax overpayments based on federal interest rates of the previous year. Something like 13% as I recall. The CFO was smarter than I was.
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