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Japan FY2021 long-term debt hits new high above ¥1,000 tril

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Every year new record high of debt without any plan how to reduce and pay it.

https://www.japantimes.co.jp/news/2021/05/11/business/economy-business/japan-government-debt/

No way this will help weaker yen.

0 ( +7 / -7 )

LDP, planning for their future, not yours.

11 ( +15 / -4 )

In my lifetime this isn’t news, its an annual occurance. Should give it a national holiday where lawmakers can pledge their bonuses toward defeating the huge debt.

Put on some white gloves and megaphones on cars about all that too.

8 ( +12 / -4 )

That is ¥1 quadrillion. ¥1,000,000,000,000,000.

For some visual comparison, if it were a stack of pennies in U.S. coin denomination, it would be a cube 2,730 feet wide x 2,730 feet in height x 2,730 feet thick, and weighs approximately 3,125,000,000 tons.

8 ( +10 / -2 )

The country's fiscal health may deteriorate further as the ruling Liberal Democratic Party and its junior coalition partner Komeito agreed in April to seek an extra budget of more than 2.5 trillion yen to help cushion the impact of surging energy and food prices spurred by Russia's invasion of Ukraine.

The bigger news out today was the release of Japan's personal spending, which dropped 2.3% in real terms from the prior year in March 2022, compared with market forecasts of a 2.8% fall and reversing from a 1.1% rise a month earlier.

The latest figure marked the first decline in personal consumption since last December, as consumers were wary of rising living costs.

Consumption fell for most categories: food (-2.5% vs -3.6% in February), housing (-19.9% vs 5.3%), fuel, light & water charges (-3.2% vs 1.9%), culture & recreation (-1.4% vs 5.6%), furniture (-5.2% vs -5.0%), medical care (-1.3% vs -0.9%), and education (-8.2% vs -14.4%). In contrast, there was a sharp rebound in spending on clothing (0.1% vs -11%).

Consumer spending is particularly key right now for this economy.

9 ( +9 / -0 )

Former Prime Minister Shinzo Abe, whose "Abenomics" economy-boosting program included bold monetary easing,

What else did it have besides this Basic Income for bankers?

The other "arrows" of "womenomics" or wage increases were always dead end window dressing.

5 ( +10 / -5 )

Most seniors prefer to use their pension and life savings to buy these bonds and slowly take interest out of it to live their remaining years. Which is not a bad idea. At this point i think the government just hope these seniors pass away at one point and hope these debt get forgotten.

1 ( +5 / -4 )

can you REALLY call if "debt" when you owe it to yourself?

-4 ( +4 / -8 )

Another point to the yen's slide

0 ( +5 / -5 )

Crazy and irresponsible continuing kicking of the debt can down the road for future generations to pay for-but why? There was no need for more money printing, but the doj did it anyway. When does the lender say to the addict ‘enough borrowing’?

3 ( +6 / -3 )

Where is my tax money going to?

5 ( +8 / -3 )

Japan is still a net creditor nation (actually the largest).

Economically Japan has its issues but nothing in comparison to many other countries.

2 ( +5 / -3 )

Does it matter? Yes. The population crisis is more serious though in my opinion because without young people that debt will never be repaid.

3 ( +3 / -0 )

The time will come that sooner or later the government will have to pay it back and then they will freeze assets of every citizen and deduct 9.66 million yen from each account.

Sell your yen until you still can.

Buy physical gold.

Collapse is immanent.

-8 ( +6 / -14 )

(Dr Evil voice) one quadrillion yen

5 ( +5 / -0 )

By simple calculation, each Japanese citizen is burdened with 9.66 million yen in debt.

This calculation is nonsense or maliciously intended. The debt is the government's, NOT Japanese citizens or private businesses. The latter are actually big creditors to which the state owes.

Don't allow the government to find any excuse to levy more from taxpayers unless they cut themselves first.

-4 ( +2 / -6 )

Next stop yen 140 to a dollar!

-4 ( +6 / -10 )

Cancel F-35s, charge rent for US bases, make a free trade organization with SK and China, buy rare metals oil and gas from Russia, and join the Belt and Road initiative with China that has access to 60% of the worlds economy.

or…shot ourselves in the foot, cancel social welfare and rely on USA private healthcare and pension system and print more money.

-1 ( +3 / -4 )

The BOJ is a subsidiary of the government," Abe told a gathering on Monday.

Well, he is right on this one....any notion of BOJ under Kuroda as being "independent" is just another example of tatemae windowdressing.

The population crisis is more serious though in my opinion because without young people that debt will never be repaid.

That debt will never be repaid - period, thats a given.

-3 ( +6 / -9 )

what a nice news...so far did not see any plans how gov wants to reduce debt at all...

economy may get at better path if people will start spend more,but for that they ned get more money but they dont/most cases/.so lower income-less spending-economy lagging well behind.

and gov n plans at all just giveaway money here and there,dont need give money support to raise kids and support family but "subsidy" petrol costs to LDP good friends and buy new weaprons because China "threat" or so...

0 ( +2 / -2 )

without any plan how to reduce and pay it.

They could get the BoJ to buy the debt. Oh, they've already been doing that for years.

Another point to the yen's slide

How? Why?

the government will have to pay it back

To its own institutions, like the BOJ and the govt pension fund, and its own residents, giving them more yen income, aka "stimulus."

-2 ( +1 / -3 )

Japan FY2021 long-term debt hits new high above ¥1,000 trillion (T):

At $7.8 T, the Japan's national debt is enormous (mainly domestic), compared to that of US's $30 T. Imagine the amount of interests to be paid.

Each Japanese shoulders a debt of $70,000 while each American $90,000..

-2 ( +0 / -2 )

The Japanese government has debt of JPY 1,000 trillion, but Japanese individuals have financial assets of JPY 2,000 trillion. Instead of individuals, the government is spending. In some respects, it is inevitable that Japanese individuals have a low appetite for consumption. Japan has no natural resources and a lot of terrible disasters. In some aspects, it is inevitable that Japanese make deposits to prepare for the future.

2 ( +3 / -1 )

The Bank of Japan does not have enough autonomy and is a government subsidiary company.

0 ( +0 / -0 )

There will come a point when expenditure outstrips tax income. However, we can guarantee that sales tax will and must increase to about 20%, and the retirement age will be pushed back to about 65+++.

Can you owe debt to yourself? Yes you can because you've still got bills to pay, and you can't print your way out of trouble for ever. Maybe for a while, but not forever.

One things for sure, Japan can't afford to increase bank interest rates, because they may not be able to service that debt, and the public may not be able to afford loans. Onto of all that the government will force everyone to take out a personal pension, further putting pressure on everyones finances. Debt is debt, and you can only rob Peter to pay Paul before Peter clicks on.

1 ( +3 / -2 )

All these old guys making the decisions to set record spending on defense, hold obscenely expensive international events, throw money at third-world countries, etc., know they'll all be dead before the bills come due. Eventually, it will all collapse, and Japan has no plan for that -- just "roll it over" and hope it happens when we're not around.

-3 ( +8 / -11 )

Some people here still argue that Japan is seemingly growing a forest of magic money-making-trees by paying, owning and repaying its debt to itself.

So, why the heck are taxes being levied and not just levied but increasing? "Just for the fun" of making the plebs gradually slide into poverty?

Some people need to get real. Money.does.not.grow.on.trees.PERIOD.

-2 ( +5 / -7 )

can you REALLY call if "debt" when you owe it to yourself?

Agree. Think that's a lesson we should have learned by now.

Inflation is very real though.

1 ( +2 / -1 )

What a basket case japan is.

-6 ( +4 / -10 )

No wonder everybody is selling yen for the Dollar and Swiss Franc.

-9 ( +4 / -13 )

So not the fact that Japan is borrowing from itself but rather the fact that it cannot raise interest rates seems to be the final nail in the coffin. The plummeting currency may make Japan slip into a second tier class country and I wouldn't care except that I am stuck here!

-4 ( +7 / -11 )

Whenever this topic comes up, it's a guarantee someone will chip in with the blasé remark: "Oh but it's Japan's domestic debt, so it's fine." At which point they need to be reminded this is not a thesis on which sort of debt is worse; just look at this debt for what it is.

The point is that Japan's "mere" stagnation for 20 years has been been to a large extent illusory. Take away the QE stimulous packages and there would have been negative growth for many a year (or many more years). In the process of delaying the inevitable, the LDP puts off making the necessary policy reforms now that might avert crisis in the 2030s and 2040s. The QE is only a painkiller only to mask the symptoms.

2 ( +4 / -2 )

avert crisis in the 2030s and 2040s

What crisis? The yen debt implodes at some arbitrary point in time?

Public sector deficit = Private Sector surplus.

You cut off government spending and watch all those yens dry up. Let it be ♫♪♪

-3 ( +0 / -3 )

Japan has run a huge trade surplus for much of the last 50 years, exports are about three times what they were at the peak of the bubble.

This debt is ultimately a way of paying a dividend to the Japanese people and industry for the decades of enviable economic success.

To somewhat twist a statistic from the article, if each person “owes” 9m, wouldn’t it be a good thing if interest rates are negative?

0 ( +1 / -1 )

Next stop yen 140 to a dollar!

No wonder everybody is selling yen for the Dollar and Swiss Franc.

Goldman Sachs today stated that they think the yen is now oversold at 130/USD, and would be a good deal for hedging against a recession despite BoJ's continued easing.

Translation: one of the world's biggest investment banks just signaled to sell your dollars to buy yen because the yen is a bargain, and even though the Japanese printing press is cranked to eleven, its a safer bet than relying on the crumbling US economy.

(what was unmentioned is that when the wind shifts like this, and everyone starts funneling their dollars to yen, it puts huge downward pressure on the exchange rate, so once it gets going, within a couple months or even a few weeks it may be back at 115/USD or even lower.)

0 ( +0 / -0 )

By simple calculation, each Japanese citizen is burdened with 9.66 million yen in debt.

This is close but incorrect. It is the number for each resident of Japan, including those of us non-citizens who still love and pay taxes here, at the moment.

the government plans to spend a record 107.60 trillion yen in the initial budget, … expecting tax revenues of about 65 trillion yen,

Anyone with one tenth of a brain can recognize that this is unsustainable.

65 trillion in.

110 trillion out.

When the repayment deadline for the debt comes, the government can roll it over, he said.

And with this comment, Abe confirms that indeed he has less than one tenth of a brain.

Since he launched his ill-advised money printing binge, what has the value of the yen done versus the US dollar? Versus gold?

”the government can roll it over”… yes… but we are not playing with “Jinsei geemu” money here, Abe…

Takahide Kiuchi, an executive economist at the Nomura Research Institute and a former BOJ board member, said the central bank's independence has been and should be maintained, calling Abe's view "too unrefined."

Too kind. He should explicitly state the obvious, Abe is a nutcase with no economic credibility, and was advised by economic nutcases as well.

1 ( +1 / -0 )

With the government swimming in deb,t and the pension plans are getting less money paid into it and those older who contributed to it continue to live longer. Japan will be no longer a safe country. The younger people are not having kids and part time work is not going to pay the bills when inflation is out pacing the income. If things don't change Japan as a nation will look very weak and the vulture with a "C" are already their buying up the land waiting to consume.

-1 ( +1 / -2 )

Ridiculous. Plus we have inflation and still they keep printing. If they allow rates to rise they will not be able to pay coupon on the debt. Insanity.

0 ( +0 / -0 )

"Whenever this topic comes up, it's a guarantee someone will chip in with the blasé remark: "Oh but it's Japan's domestic debt, so it's fine."

Whenever this topic comes up, it's a guarantee someone will chip in with the blasé remark: "Oh but Japan will collapse tomorrow."

It hasn't and it won't.

And it's true, it's their own debt for them to deal with.

They owe almost nothing to outsiders.

"Critics" ether don't know, or pretend this is the same as owing to 3rd parties.

2 ( +3 / -1 )

the blasé remark: "Oh but it's Japan's domestic debt, so it's fine."

Blase but true. What exactly are the fiscal strains the fiscal debt is placing on the economy?

Each Japanese shoulders a debt of $70,000 

Except they don't. Got any proof, like a publicly issued debt instrument, that obliges you personally to pay the Japanese govt $70,000? Didn't think so.

So, why the heck are taxes being levied and not just levied but increasing?

Because taxation policies are the work of politicians, who usually study law rather than economics, and thus don't understand the nuts and bolts of public finance.

-3 ( +1 / -4 )

Blase but true. What exactly are the fiscal strains the fiscal debt is placing on the economy?

To suggest that the debt is a non-issue, simply because it is domestic debt rather than external, is actually very irresponsible, and doing a disservice to the realities Japan must face up to.

I get the sense there are many out there who love Japan (rightly) and so won't hear a bad thing said about the country, who still cling to that mid-80s futuristic economic powerhouse image, but are on some level in denial. It exists among the Japanese as well. It's comparable to Brits in the 1890s who saw Empire and naval superiority as somehow inevitable, God-given.

There is no getting away from it: Japan in the 2030s and 2040s is stairing down the barrel of serious economic decline without radical policy changes, not least immigration policy. Robots are not going to be enough fix that.

To reitierate: What I am trying to get across is that it is largely irrelevant whether the debt is domestic or external or subject to default or not. The point remains the illusion of 'stagnation' for over 20 years now has only been something of a QE magic trick. Take all that stimulus away and the country would already be in depression. (And no, it's NOT the same situation as in the US, where 2% or so economic and population growth is quite likely for another 30 if not 50 years)

Should the UK, France, Germany, use their national banks to print bonds and let their public debt rip through to 300% of GDP, build themselves extravagant new bullet trains? Perhaps none of it matters.

-1 ( +0 / -1 )

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