Skip to comments.Japan's National Debt Hits Record High
Posted on 09/23/2005 7:28:18 AM PDT by RockinRight
TOKYO - Japan's government debt, already the highest in the industrialized world, rose 1.7 percent to a record high of 795.8 trillion yen ($7.1 trillion) at the end of June, according to a report released by the Finance Ministry. ADVERTISEMENT
The latest figure marked an increase of 14.3 trillion yen from the end of March , the ministry said Thursday. The amount is equivalent to about 6.24 million yen ($55,900) for every Japanese.
Japan has relied on government bond issues to make up for falling tax revenues, turning into one of the world's most indebted countries.
Japan's public debt burden is almost 160 percent of its GDP and already the highest in the industrialized world.
Prime Minister Junichiro Koizumi, voted back to office following a landslide win in the Sept. 11 lower house elections, has pledged to improve the country's finances by reining in public spending and creating a smaller government.
A package of bills that would privatize Japan's massive postal service, set to be approved during a special parliamentary session that began Wednesday, has been the cornerstone of Koizumi's reform agenda.
Advisers to the government have also been mulling ways to raise taxes when the nation's economic recovery takes firmer root.
Raising taxes would be the perfect way to halt Japan's economic recovery...
How can this be? They have a trade surplus and a high personal savings rate. Just another example of why our economy remains the envy of the world.
Nothing will get better in Japan until they stimulate more personal consumption. The power of their trading companies needs to be broken and their archaic distribution system has to become more efficient.
Yeah, and I remember all those books by Mr. Sony talking about why his business model was so great --- they are all but bankrupt, with inferior products living off the name.
I need to pull out old Newsweeks with "Japan Overtaking the US" panic on the covers.
I remember when they were going to own our entire country.
Fact:Japan's national dept if printed and stacked would circle three times around Andromeda.
How many times would our debt (U.S) go around?
Our debt is slightly lower in numbers than theirs, but even lower as a percentage of GDP.
I just get tickled at their currency. Can't they just create a new one or do they just favor large numbers?
I wonder how much they own of our debt, and how much we own of their debt. Mutual cancellation might make the numbers look better to both of us.
160% of GDP? Wow. And I thought (and still do think) that our 64% of GDP was bad.
It is still bad, but in a sick, twisted way, it kinda makes ya feel a little better doesn't it?
Agreed on all counts.
Japan: $702 billion
China: $250 billion
Caribbean Banking Centers: $103 billion
Korea: $67.1 billion
OPEC nations:$65.3 billion
Germany: $59.5 billion
Mexico: $40.6 billion
Heh. Hearing makes me realize (despite our current deficit) that we could be a LOT worse off.
Is that the government that owns, it though? And do we own any of their debt?
Historically, most of our debt has been financed domestically. Recently though, this has changed dramatically.
At the end of 2004, foreign central banks owned $1.2 trillion of the $1.9 trillion of Treasury bonds, bills and notes owned by foreigners, 60 percent of the total.
Most of this is being by purchased by central banks, especially by China and Japan, to control the value of their currencies vs. the dollar and protect their export driven economies.
Here's and excellent article from Bruce Bartlett on this very subject.
As for American's buying foreign debt...I don't really know the answer to that. Here's more from the article:
Because the dollar is the dominant world currency, the one in which the bulk of world trade takes place, including all transactions in the oil market, the U.S. has the luxury of ignoring the international value of the dollar. It goes up or down on the free market, largely free of intervention by the Treasury Department.
In 2003, foreigners bought $829 billion worth of US bonds, while Americans increased their ownership of foreign financial assets by $283 billion. I don't know how much of that $283 billion invested was in bonds and how much was in stocks. The difference ($546 billion) was about equal to the current account deficit for that year.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.