Inflation is good for debtors if wage keeps pace with inflation. That's it.
Taken to the extreme: Imagine I make $100k in 2030. I take out a 1 year loan for $10k @ 5% (10% my income). Inflation is at 50%, but my wages keep up. 2031: I make $150k. I pay back the loan: $10.5k (7% my income). The loan is worth less as a percentage of my income, because of inflation and wages keeping up.
Generally speaking, wages do keep rough pace with broad CPI inflation, if the inflation is slow, predicted, and a product of monetary policy. The issue in today's climate is multifold, but: first, there are critical sectors of consumer goods which are substantially out-inflating even the elevated CPI averages (housing/rent & microchips are the biggest). Second, most CPI-calculated goods are inflating not due to monetary policy, but due to supply-shock, which is harder to mitigate with wage increases because, well, in short, companies can't make money to give workers raises if they can't sell stuff.
