Discussion for article #235698
When you see how little understanding of economics bond rating agencies seem to have, institutionally, the role they played in creating the 2008 financial crisis becomes more comprehensible.
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“The country eventually has to boost taxes to cover rising costs for health and elder care as the average age in the nation rises.”
Whuyyyy, hell gnaw! Not in Ahmurkuh we won’t!
Shore, they had them there kamakazis but we ain’t no gald-dern cowards lyke theym: we die slooooooooooo without awl thet sissy socialized medicine.
Ewe Ess Aye! No more dad-burned taxes! Let 'em die first!
Sheesh - another article by another idiot author who doesn’t know that Japan is a monetary sovereign like the United States who by definition cannot be in “debt” since its “debt” is money by fiat!
Japan’s so called “debt” just like the United State’s so called “debt” is nothing more than the total aggregate of unmatured treasury issues which turn into cold hard cash at maturity since they are money by fiat and therefore they don’t require a single cent of taxpayer money to be paid off.
Before some know-nothing replies here is a link for you to first educate yourself before replying:
At the risk of getting off into the accedemic weeds here, the issue isn’t the absolute size of the debt, it’s the ratio of public debt to GDP. The ratio for Japan is 2.26 to 1. That means that Japan’s denominated debt is 2.26 times the value produced in the country in a year… Japan’s ratio is the highest in the entire world by a comfortable margin. Number 2 is Zimbabwe at 2.02. Nobody else is above 1.5, except Greece at 1.61. The United States, for example is at 0.72, approximately 1/3 of that of Japan. in order to have the same ratio as Japan, the United States would need to have a 38 Trillion dollar public debt. It’s currently a smidge over 18 Trillion. Japan is in a huge, huge bind because they have a major generational crisis ongoing and need to expand expenditures on aged pensions and healthcare costs and fiat currency or not, monitizing an amount of that size is incredibly inflationary. Japan has many stabilizing factors, which is why their downgrade only dropped them to an A rating, but there are some serious structural problems in the Japanese economy that are likely to get worse over time.