Inflation accounting for the debt argues which of the following?
A. The change in the value of the debt when inflation occurs complicates income tax codes and is the reason for the tax changes of 2003.
B. The portion of interest payments that compensate lenders for inflation should be considered repayment of debt rather than interest expense.
C. The debt represents an inflationary problem, and grows more rapidly when people fear inflation.
D. The portion of the deficit dedicated to repayment of interest on the debt should not be considered part of the deficit, because it is a transfer.
Answer: B
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