Thom Harrison comments

Posted in: Japan gov't long-term debt to top ¥1,000 trillion See in context

Whenever Japan's debt question is raised, it's guaranteed someone will chip in with the old chestnut that "It's fine, because it's national held debt". The fact is that, yes, in the case of an economy like Greece, external debt is an awful thing but, in the case of countries in relative fiscal health, there's a strong link between external debt and foreign investment and innovation. When it comes down to it, it's academic whether or not it is publicly or externally held; there is still no getting away from the fact that Japan's quality of life for the last 25-30 years has been sustained almost entirely on the babyboomer's credit cards. Japan's debt today is comparable to Britain's in 1945 - after funding a global war. I doubt the Japanophile tourists who come for a week to see the shiny streets of Shibuya and Dotonburi grasp the tax rises, the salary stagnation, the cracks forming in the infrastructure, the ghost towns, the newly-built coal power stations...

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