Japan's public debt

Discussion in 'General Global Topics' started by ESay, Oct 14, 2019.

  1. ESay
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    ESay Silver Member

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    Almost all countries have public debts. But some levels of these debts are astounding. Japan is one example having a rate of approximately 230% per GDP and ranking 1st by this rate. And this level is growing.

    What I can't get is how this country is supposed to repay its debts. And how can the investors be sure that they will get their money back?
     
  2. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    Their debts are in Yen. Most of their debt is held by their own citizens.
     
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  3. ESay
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    ESay Silver Member

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    Yes, but this doesn't change the fact that the debt must be paid.
     
  4. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    Their central bank can print Yen, if the need arises.
     
  5. ESay
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    ESay Silver Member

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    But this would cause hyper-inflation and massive drop of the Yen value.
     
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  6. Andylusion
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    Andylusion Gold Member

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    Well, any country can pay down it's debts, by simply spending less money than it brings in with taxes.

    Japan can.... Cut it's spending. It *can*... but likely won't, not in the short term, or at least until there is a crisis.

    Ultimately, if you privatize the pensions, privatize the health care system, and stop blowing money on high speed rail which is a massive money loser.... they can run a surplus and start paying down debt.

    There is yet another way.... but this way will actually be by far the more difficult method.

    They could drastically change their culture, and greatly increase the birth rate. The biggest immediate problem, is that they have a massive number of retirees, and a greatly shrinking work force.

    While it is true that the numbers seem particularly astounding.... the fact is, any country can budget their way out of debt. Just like any person, or family, can make the cuts needed to pay off their debts.

    The question is only if the public is willing to understand the problem, and make the sacrifices needed to do what is required.

    It's impossible to know what the Japanese people will do. However, is is possible. It just is. It's only a matter of, will the people accept what is needed to be done?
     
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  7. Unkotare
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    Unkotare Diamond Member

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    :rolleyes:
     
  8. Toddsterpatriot
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    Toddsterpatriot Diamond Member

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    One hypothetical worry at a time.
     
  9. ESay
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    ESay Silver Member

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    Yes, I agree. Privatizing pensions and health care is the way which many developed countries will follow.

    What is more astounding about Japan is that 40 percent of state expenditures are financed through borrowings.

    I don't know whether there are ways to cut these spendings avoiding drastic dropping of citizens well-being. Privatizing pensions is a too late move, it seems. What to do with huge amount of pensioners which already rely on state pensions?

    Cutting spendings of big infrastructure projects will be echoed by closing some jobs, which in turn will require additional state spendings on support of the fired.

    Maybe vast using of foreign workforce will help to solve this problem. But the Japanese aren't in favour of it.
     
  10. Unkotare
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    Unkotare Diamond Member

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    The number of foreign workers has been steadily increasing over the past decade and is set to grow more in the near future.

    You can't just say "increase their birth rate" as if a decision by some government office would result in the sudden emergence of tens of millions of highly educated 20 year-olds. Demographics is a huge ship that doesn't turn on a dime. China is facing the consequences of this fact in the not-so-distant future.
     

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