An Honest Interest Rate

Discussion of interest rates almost always concerns the supposed impact on a variety of economic factors, but I've never heard such a discussion mention the importance of repaying our debts.

When prices are rising, as they usually are, the value of money is falling, so to repay a debt requires the payment of more money than was originally borrowed. Interest charged for a loan should include some payment for the convenience of having the loan. Full compensation to the lender would also require something to compensate for the income tax often charged on interest. There is therefore a case for interest rates being substantially higher than the rate of inflation. In practice they are almost always considerably lower.