Let's imagine a country with excessive national debt. Its local governments also have borrowed way too much. And let's say its people also have a gigantic mound of consumer debt. In fact, many have mortgage balances higher than the value of their homes. And let's call this country the "United States of America" (the "U.S."). How do you fix the U.S.'s debt problems? One possible solution is to adopt higher levels of inflation.
The logic here is easy. As inflation rises, so do wages. That helps take care of the consumer debt problem faster: people begin making more in nominal dollars, some of which they can use to more quickly pay off their debt. Inflation also drives the nominal value of their homes higher to better match their mortgage balances.
And of course, the government debt problems fade too, since tax revenues would rise as wages are inflated. So federal and local governments can fix their budgets as well.
This all sounds great, which is why some progressives have suggested that the U.S. ought to just inflate away its debt problem. Unfortunately, there are some significant problems that higher inflation also creates. For one thing, it serves as a transfer from savers to borrowers. So it harms people who have sacrificed to have a more stable retirement, while helping people who have spent irresponsibly. But it also creates potential macroeconomic problems for a nation.